Omnipresent poster boy for thoughtful and iconoclastic Conservatives Philip Blond has backed the Robin Hood Tax. He did so at a debate tonight hosted by Unicef UK and Tory progressives Bright Blue. He argued that it would be a small pro-free market levy for social purposes, and would build “the externality of the real economy” into short-term damaging speculation.
Philip (who puts a lot of effort into being interesting) was clearly the most interesting speaker. But whilst he supported a transactions tax, he fudged many of the key questions like the expected scale of the income (as he said, opinion is divided). When he could tear himself away from (erudite and – again – iconoclastic) reflections on the role of rigged markets and monopolistic rent seeking in the banking crisis, he accepted the argument that transactions taxes could shift the balance between short-term speculation and long-term investment. A Robin Hood Tax would penalise damaging activity by “pricing in the externality of the real economy”. On global co-ordination, he said that something was going to be agreed globally, so a Robin Hood Tax would be as feasible as any other.
Lord Newby, Liberal Democrat Treasury spokesperson, expressed support and said “the good news is that bank taxes are on the agenda … and the Robin Hood Tax seems to be feasible and workable”. But he noted that everyone has their own competing version of a bank tax, and he expressed concern that the tax might be spent on other things than global poverty (surely one of its strengths – broadening its appeal – a point Philip Blond made). His main warning was: “don’t take your eye off the domestic ball” which surely makes the point. But he also noted that the banks have so far been more effective at global initiatives than politicians, not least blackmailing us all by threatening to go elsewhere.
Patrick Nolan, Chief Economist of the Think tank Reform, correctly described himself as the Sheriff of Nottingham – but he was too Sheriff-like, a cartoon and ineffective villain. He claimed that the ends were fine but the means flawed (he supported regulation rather than taxation). He said it wouldn’t raise the money claimed for it, and what it did raise would be passed on (the incidence argument). He used some pretty hackneyed – and in some cases frankly bizarre arguments (apparently the UK Stamp Duty doesn’t raise much – barely £3 billion! – because it exempts many transactions… Er….). Dr Nolan comes from the “tax is bad” camp and his arguments are too easy to rubbish.
Dave Hillman of Stamp Out Poverty put the case as ably as ever for Robin Hood, but had to spend most of his time knocking down the straw men Patrick Nolan had shoddily set up.