A CHANGE IN THE WEATHER

CSM welcomes the proposals for two new taxes on the international banking industry put forward this week by the International Monetary Fund in Washington DC. However these proposals do not solve the fundamental structural problems in the banking industry caused by the mixing of risky speculative banking and regular high street banking. CSM led a campaign supported by 98 MPs in the last parliament calling for the separation of retail and casino banking. Please see CSM website for detailed arguments and information. The very fact that we are discussing a fund to be used in the event of another bail-out should make it clear to anyone that the system is broken. It’s like selling someone a used car with a spare engine for when the present one inevitably seizes. I don’t think you’d buy that car.

For years at CSM we have been saying that with the privileges of being border-crossing (both real and virtual) global citizens, comes a responsibility to our global village. Those who reap the rewards of our global economy should be contributing to the global economy. The lack of international mechanisms for effectively doing this was a crucial factor in why things spiralled out of control, leading to the financial crisis. Yes, global agreement is required, but that should not dissuade countries like the UK from leading the way.

This all shouldn’t obscure the fact that the IMF’s announcement last night would have been unimaginable even two years ago. They have accepted that a tax of this kind is workable, which was the primary excuse offered by bankers until now. It does show how far we have travelled, but falls short of even making up the losses the banks caused. The IMF accepts that the crisis caused the loss of 2.7% of GDP across the G20 countries and their proposals would only scratch the surface of that, compared to what the Robin Hood Tax could produce. The arguments are however not simply about providing cash. The effect of a currency transaction tax would also work to curb the excesses in global currency speculation, which often leave developing country economies at the mercy of Wall Street and the City of London.

The Robin Hood Tax shouldn’t be seen as just robbing from the rich to pay the poor, because it is simply asking those who profit extensively from a system to contribute to that system. It is the least we can ask of a sector, which wrongly regards the environment as an infinite resource to be tapped. The effects of this excess consumption in climate change can be seen all over the planet already.

The key thing now is to press the G20 meeting in June to go further, along the lines of the Robin Hood Tax proposals. Support can be registered, policy detail explored and videos viewed at www.robinhoodtax.org.

Andy Flannagan, 21/04/2010