Off to Mansion House… via Sherwood forest?
Our brand new Chancellor is revealing his master plan for financial regulation in Britain as part of his Mansion House speech tonight. It finally promises some gritty detail on how the coalition government’s proposed bank levy can get the big banks to pay for the economic mess they’ve left us all swimming in.
That a bank levy is even on the cards is a big victory for the tenacious Robin Hood Tax campaign, and a sign of the positive influence of the Liberal Democrats on the coalition. But the big question for these budget slashing times is – will it raise enough?
Online chatter is predicting it will be more than the £1bn that Osborne had proposed while in opposition. But if you put our budgetary black hole, next to the predicted £90bn in reported profits and bonuses for the UK finance sector next year – then George needs to get a bigger calculator, and needs to consider more options than just a levy.
He need look no further than the IPPR’s excellent report on finance sector taxes. It shows that by clamping down on tax avoidance, levying financial institutions, and taxing profits and bonuses or financial transactions, we could raise up to $20bn. That’s the difference between a lot of nurses and teachers being allowing to continue their vital work, or the public services train wreck that’s currently on the cards.
The report adds that – true to its name – a Robin Hood-style tax, unlike the VAT, falls more on the rich than the poor. And it would fall more on high-frequency traders and their destructive, speculative behaviour.
So George faces a big choice tonight: go down in history as one of Robin’s merry men that saved jobs and the economy, or as the axeman that took us all down swinging.