Saturday, 13 February 2010

An afternoon in Northgate, but no sign of Robin Hood

Out in Northgate ward this afternoon with our excellent local Focus team, bubbling with enthusiasm and working hard towards 2011. The recent ward survey showed many problems in what is one of the most deprived wards in the town. Our guys, who have lived all their lives in the ward, are already taking action on some of these issues.

Years of Labour control over the Council and in Government and yet the huge disparity in opportunity and achievement, life expectancy, health, employment and income between wards like Northgate and the affluent west end of the town is as wide as ever.

The people in the ward I spoke to have just about had enough of Labour and their grand vanity projects. There is a strong undercurrent of disillusionment. The task now is to make sure that translates into Lib Dem votes rather than no vote at all. One thing is certain, compared with 2007, there are far fewer people expressing undying loyalty to Labour. Their vote is soft...very soft.

I see on her Facebook page that for some reason our young Labour candidate seems keen on getting myself and the Tory guy to sign up to the Robin Hood Tax on banks. I'd love to be able to support it, I really would. I've even ticked some box somewhere to show my support for the principles behind it, but can someone explain to me how a tax on transactions will benefit our economy?

As I understand it, in most years this level of penalty, since it does not relate to profits, would actually drive the banks into the red and would therefore reduce the country's income from taxation. Indeed, to pay it the banks would have to use the government's bail-out money! And furthermore, a tax on transactions in this country would surely lead to the multinational banks conducting their business elsewhere with a consequent loss of taxation income and employment here.

It seems to me to be a simplistic proposal based more on a desire to punish than on a pragmatic understanding of the way the banking sector works. More sensible, surely, would be tighter regulation over the activities of the banks and their bonus structure, rather than a sledgehammer, one size fits all, approach which could actually do more harm than good.

6 comments:

james said...

We woke up with our Tory head on, did we, Mike?

It's not intended as a penalty, but as a way of raising money to for anti-poverty initiatives both here and abroad.

Since the ammount of financial transactions has more to do with the ability to conduct such business at great speed.

It's a shame that you didn't read up on the subject before deciding to blog, Mike.

Mike Barker said...

On the contrary, James. I have read up on it, which is why my initial enthusiasm for the idea has been tempered by the realisation that it probably won't do what it says on the tin, for the reasons stated above.

A superfically attractive idea let down by a failure of its organisers to think through the consequences of the proposal.

Taxes should be based on the ability to pay, not how apparently busy the taxpayer seems to be.

james said...

But you obviously haven't read up on it.

You say "a tax on transactions in this country would surely lead to the multinational banks conducting their business elsewhere with a consequent loss of taxation income and employment here."

But on the RHT website it specifically says "We are calling for governments around the world to implement a tax on financial transactions"...

Interesting comment you make btw:

"Years of Labour control over the Council and in Government and yet the huge disparity in opportunity and achievement, life expectancy, health, employment and income between wards like Northgate and the affluent west end of the town is as wide as ever."

How would a Liberal council or government narrow these gaps...?

Anonymous said...

Ability to pay? That's exactly the point.

Mike Barker said...

You think the Americans will go along with this then, James? I'd prefer to support realistic and achievable goals to ensure we don't have a repeat of the recent banking crisis, rather than engage in gesture politics.

And anyway, what's all this about Robin Hood? He'd be turning in his grave if he thought a tax intended to take money from the private sector and put it in the hands of the Government had been named after him. I guess we'll have to wait for the definitive interpretation from Russell Crowe, heaven help us, in the summer, but I somehow thought RH's actions were a direct result of Richard demanding taxes to pay for foreign adventures and John demanding taxes to fill his coffers and raise an army to take over the country.

If there was one thing RH despised it was taxes!

As for your last point, when our manifesto is published I'll send you a link! Though the general aim must surely be to break the cycle of dependency and reliance on the state. While there must always be a safety net, the state has become too big, too intrusive and too overbearing (as RH migt have said!).

Have faith in the power of individuals to improve themselves: don't simply throw more and more money at problems which only creates dependency.

james said...

"I'd prefer to support realistic and achievable goals to ensure we don't have a repeat of the recent banking crisis, rather than engage in gesture politics."

What are you doing in the Liberals, then Mike? ;-)

It's not gesutre politics. A transaction tax has the backing of the German and French governments. Figures within the governing US party such as Nancy Pelosi are supportive of the idea.

You sound a bit like Thatcherite now, Mike - cut state spending and somehow people will be able to advance! Yeah, right - sounds like a recipe for plunging people into extreme poverty...

I do have faith in the power of people to improve themselves, Mike, but there's nothing wrong with using state power to do this. Are you against the NHS, state education, police?

How far are you going to go with this Tory rhetoric?