Could Robin Hood tax be poised to make election bow?

Chris Blackhurst
1 Mar 2010

Last Thursday, I went along to the House of Commons for a discussion with the Liberal Democrats on the proposed Robin Hood tax.

Present were representatives from some of the charities pushing for the measure — a levy on international banking transactions which would be used for good causes, so taking from the rich to give to the poor, same as Robin Hood — academic experts and Vince Cable and Baroness Williams from the Lib-Dems.

There is always a surreal aspect to Lib-Dem policy planning — not that the leaders would ever admit as much, of course — which is that, being unlikely ever to grasp the levers of power, it is highly improbable that anything they formulate will reach the statute book.

What increased the unrealistic air to this session was that as we met, Royal Bank of Scotland was announcing bonuses to staff totalling £1.3 billion, despite the bank's having made a loss of £3.6 billion. Indeed, Cable was late because he'd been giving TV interviews about RBS.

The sense of detachment, of banks, even state-controlled ones, steaming ahead and behaving just as they used to, and politicians and others wondering what to do about it, was palpable. There was, though, an edge to the gathering.

We may well be heading for a hung Parliament. It's not beyond the realms of possibility that Cable could yet emerge as Chancellor of Exchequer in a joint administration — the price of Lib-Dem support being his accession.

Also, the idea of the tax itself has been gathering support ever since the campaign backing it was launched two weeks ago. The special video, directed by Richard Curtis and starring Bill Nighy, has gone down a storm and has been shown across the world. The dedicated Facebook site has attracted more than 100,000 supporters. Politicians from all sides have swung in behind it.

What is lacking so far, however, is agreement from the banks themselves — their co-operation was always a far-fetched proposition but not impossible. All that was being sought after all, was a 0.05% levy or 50p on every £1,000 traded.

The banks' argument is that they see the charge as a slippery slope — they might be paying only 0.05% now but it could escalate to 0.5% and beyond later. Yes, but why wait for others to suggest it and promote it and see it imposed? Why not seize the moral PR high ground and volunteer to introduce it?

This, of course, really does start to enter the realms of fantasy because if there is one characteristic of this whole sorry banking crisis it is the ability of the banks to conduct the most appalling PR.

They like to see themselves as the brightest and the best, yet their failure to strike a positive note that chimes with the rest of society, to acknowledge the assistance they received as an industry from the taxpayer, is lamentable.

It also continues to disturb.

Day after day, as the gap between Britain's richest and poorest widens, the likelihood of class conflict, with the bankers as the principal target, edges nearer.

I used to think such talk was scaremongering but not any more: the anger directed against the bankers is fierce and shows no sign of abating. When, as seems inevitable, public services are cut and the perception is that they are being made to pay for the excesses of the bankers, the temperature will increase still further.

The other lacuna is the political leaders. Gordon Brown is quietly supportive, George Osborne can see the merit but appears worried about the political fallout of being seen to introduce another fiscal measure. In Europe, Angela Merkel and Nicolas Sarkozy are in favour. In the US, Obama is opposed, preferring to put his weight behind his own tax plan.

In the absence of any assistance from America, the likelihood now is for a Robin Hood tax launched by the UK or Europe and probably not for as much as originally mooted but a tenth of that — so 0.005%. Judging by his reaction, Cable may be the first senior politician to come out loudly and publicly for the tax. As he said on Thursday: “Global never happens. It's like global disarmament — you have to aim unilaterally.”

To give some idea of what it could achieve, a tax of 0.005% on trades in sterling would raise about £4 billion annually — not much compared with the tens of billions poured into save the banks but enough to save some threatened public facilities.

Cable is close to making up his mind, if he hasn't done so already.

Robin Hood could be about to make an appearance in a general election.

Eric Daniels' contempt for us, his paymasters

Still on the subject of bankers and PR, we've been treated to the sight of Stephen Hester sitting astride a horse in hunting gear and Eric Daniels dodging a BBC reporter.

More careful thought by Hester might have suggested that now is not the time to be seen partaking in a sport so closely identified with the landed gentry.

Hester, though, could not be accused of evading the media flak over RBS's results and the payment of bonuses. He came across as open, honest and serious in his attempt to turn the bank round. Nobody could fault him for that.

Alas, Daniels. There's a bank, 41%-owned by the taxpayer and he will not deign to stop and talk to a journalist about its results. Of course the bank will make excuses and say he did take part in pre-arranged Q&As.

But that isn't what was on my TV. What I saw was appalling — surely he knew the camera was running? Is Daniels not so pre-programmed that he cannot answer impromptu questions?

While other bank bosses were never out of the limelight when their organisations were growing at a furious pace, Daniels always maintained a low profile.

It can be argued that his reluctance to play to the gallery in the past served him well. They duly went and Daniels survived — the only one of the bank chiefs directly rescued by the Government to do so.

But if Daniels thinks that Lloyds did the country a service by taking over HBOS and therefore deserves praise not criticism we should also remember it was a deal that Daniels had long wanted.

In any event, with the taxpayer so dominant on your share register you can't behave in such a dismissive fashion. If ever there was a dead CEO walking it was right there, on the television news, when Daniels didn't slow down and blanked the reporter.