11 EU countries are about to implement an FTT: the UK should make it 12

The Overton window is shifting, and now might be the time for an FTT.

In UK political circles, little serious consideration was given to the idea of a general financial transaction tax (FTT) before the financial crisis and recession. The City’s view that it would damage the UK’s successful financial industry held sway. But in the last few years, politicians have become more sceptical about what the City tells them and have expressed varying degrees of support for the principle of an FTT. The stumbling block, though, remains the possibility that an FTT introduced unilaterally in the UK would see the City lose business to other financial centres, in particular to New York.

Like the perennial threat that bankers are on the brink of leaving London for other shores as a result of the bankers bonus tax, or the bank levy, or the 50p tax rate, this claim is exaggerated. A badly designed FTT might result in business leaving these shores; a well-designed one could minimise that risk.

And the UK already has a well-designed FTT to act as a model: stamp duty on share purchases. This is very hard to avoid because the tax is paid when the change of legal ownership of shares is registered. If the tax is not paid, the purchaser does not legally acquire the shares. At least 30 other countries also have effective FTTs, and they are applied in 13 of the world’s top 15 financial centres.

Now 11 EU countries, including Germany, France and Italy, intend to introduce a financial transaction tax of 0.1 per cent on trades in shares and bonds and 0.01 per cent on trades in derivatives. We have argued in a recent paper that the UK should join with these countries broaden its FTT to trades in bonds and derivatives. If it is worried about losing business to New York, it should actively lobby US policy makers to introduce an FTT of their own, rather than waiting passively for them to act.

It has been estimated that joining the other 11 EU countries could raise up to £20bn a year in additional tax revenues. These could be used to ease the pressure for cuts in departmental spending and welfare payments. Better still, some of these revenues could be diverted to capitalise a British Investment Bank that would invest in infrastructure projects and lend to small and medium-sized business.

In a recent speech, Ed Miliband backed the idea British Investment Bank, together with a network of regional banks to help revitalise the economy. But he has not identified where the money to set up these banks and enable them to start lending would come from. Given the UK’s still large public sector borrowing requirement, this is a serious omission. An FTT could be the answer.

Of course, setting up these banks will take some time. In the interim, revenues from an FTT could be used directly to increase public spending on infrastructure. This would reconcile theviews of the Business Secretary, Vince Cable, who made the case for kick starting economic growth by investing in infrastructure projects and the Prime Minister, who has argued against unfunded tax cuts and borrowing for spending.

Extra infrastructure spending, a new bank – or set of regional banks – and a tax on financial transactions will not, on their own solve the UK’s economic problems. But they would be a step in the right direction. 11 EU countries are about to implement an FTT; the UK should make it 12.

Photograph: Getty Images

Tony Dolphin is chief economist at IPPR

Getty
Show Hide image

Is it OK to punch a Nazi?

There are moral and practical reasons why using force to stop a far-right march is justified.

It says a great deal about Donald Trump that for the second time under his Presidency we are having to ask the question: is it OK to punch a Nazi?

More specifically, after the events in Charlottesville last weekend, we must ask: is it OK to turn up to a legal march, by permit-possessing white supremacists, and physically stop that march from taking place through the use of force if necessary?

The US president has been widely criticised for indicating that he thought the assortment of anti-semites, KKK members and self-professed Nazis were no worse than the anti-fascist counter demonstrators. So for him, the answer is presumably no, it’s not OK to punch a Nazi in this situation.

For others such as Melanie Phillips in the Times, or Telegraph writer Martin Daubney, the left have seemingly become the real fascists.

The argument goes that both sides are extremists and thus both must be condemned equally for violence (skipping over the fact that one of the counter-protesters was killed by a member of the far right, who drove his car into a crowd).

This argument – by focusing on the ideologies of the two groups – distracts from the more relevant issue of why both sides were in Charlottesville in the first place.

The Nazis and white supremacists were marching there because they hate minorities and want them to be oppressed, deported or worse. That is not just a democratic expression of opinion. Its intent is to suppress the ability of others to live their lives and express themselves, and to encourage violence and intimidation.

The counter-protesters were there to oppose and disrupt that march in defence of those minorities. Yes, some may have held extreme left-wing views, but they were in Charlottesville to stop the far-right trying to impose its ideology on others, not impose their own.

So far, the two sides are not equally culpable.

Beyond the ethical debate, there is also the fundamental question of whether it is simply counterproductive to use physical force against a far-right march.

The protesters could, of course, have all just held their banners and chanted back. They could also have laid down in front of the march and dared the “Unite the Right” march to walk over or around them.

Instead the anti-fascists kicked, maced and punched back. That was what allowed Trump to even think of making his attempt to blame both sides at Charlottesville.

On a pragmatic level, there is plenty of evidence from history to suggest that non-violent protest has had a greater impact. From Gandhi in to the fall of the Berlin Wall, non-violence has often been the most effective tool of political movements fighting oppression, achieving political goals and forcing change.

But the success of those protests was largely built on their ability to embarrass the governments they were arrayed against. For democratic states in particular, non-violent protest can be effective because the government risks its legitimacy if it is seen violently attacking people peacefully expressing a democratic opinion.

Unfortunately, it’s a hell of a lot more difficult to embarrass a Nazi. They don't have legitimacy to lose. In fact they gain legitimacy by marching unopposed, as if their swastikas and burning crosses were just another example of political free expression.

By contrast, the far right do find being physically attacked embarrassing. Their movement is based on the glorification of victory, of white supremacy, of masculine and racial superiority, and scenes of white supremacists looking anything but superior undermines their claims.

And when it comes to Nazis marching on the streets, the lessons from history show that physically opposing them has worked. The most famous example is the Battle of Cable Street in London, in which a march by thousands of Hitler-era Nazis was stopped parading through East End by a coalition of its Jewish Community, dockworkers, other assorted locals, trade unionists and Communists.

There was also the Battle of Lewisham in the late 70s when anti-fascist protesters took on the National Front. Both these battles, and that’s what they were, helped neuter burgeoning movements of fascist, racist far right thugs who hated minorities.

None of this is to say that punching a Nazi is always either right, or indeed a good idea. The last time this debate came up was during Trump’s inauguration when "Alt Right" leader Richard Spencer was punched while giving a TV interview. Despite the many, many entertaining memes made from the footage, what casual viewers saw was a reasonable-looking man being hit unawares. He could claim to be a victim.

Charlottesville was different. When 1,000 Nazis come marching through a town trying to impose their vision of the world on it and everywhere else, they don't have any claim to be victims.