On the Financial Transaction Tax, why is Osborne on the side of the one per cent?

Today Dr Rowan Williams came out in support of a Financial Transaction Tax - yet George Osborne still opposes the tax that would raise billions for the poor.

With each passing day, more and more big names come out in favour of the Financial Transaction Tax, a tiny tax on financial transactions which could generate billions to fight poverty. Today the Archbishop of Canterbury joined the ranks of the 99 per cent; tomorrow Bill Gates is expected to tell the G20 why it should be adopted…

Yet, despite the growing clamour, and despite the increasing anger at the obscene pay rises afforded the super-rich while the rest of the country is squeezed, one man, George Osborne, appears bent on sabotaging the FTT.

The man who once said “we’re all in it together” in the austerity drive (yes, really), was today exposed as being shoulder-to-shoulder with the one per cent, as secret letters he sent to bank bosses on Monday were revealed.

In the letters, City A.M. reports:

The chancellor appears to contradict his public stance that he is firmly in favour of a Tobin or financial transaction tax (FTT) if only there were support to impose it globally… Osborne assures them [the bankers] that “the necessary international consensus does not exist” to impose it.

Osborne adds:

“Beyond this, I agree there would need to be further discussions about whether any FTT model offers an efficient mechanism to raise revenue.”

As City A.M. say:

The private reassurance to bankers that he remains unconvinced about even a global Tobin tax using “any FTT model”, despite his public support for one, will relieve many in the City but could leave him vulnerable to charges of hypocrisy.

His remarks were seized upon by Labour, shadow Treasury minister Chris Leslie explaining:

“For all his warm words in public about backing an international financial transactions tax, we now know the chancellor is giving the banks nods and winks in private that he wouldn’t support one – even if it is agreed internationally.

“This revelation explains why George Osborne has failed to put this issue on the international agenda in the last 18 months and why he won’t be pushing for it at this week’s G20 summit.

“We support a financial transactions tax, but if it is to work and safeguard jobs in Britain it must be implemented with the widest possible international agreement including major financial centres like New York. That means showing real leadership on the world stage and in the G20 which this out of touch Government has conspicuously refused to do.”

Indeed.

As Osborne appears confused by the FTT model, we hope this short video will set him straight:

It really is that simple.

See also:

Miliband and Balls need to be more vocal in support of the Robin Hood TaxVaughan Gething AM, October 17th 2011

Osborne increasingly isolated on Financial Transactions TaxOwen Tudor, September 19th 2011

Robin Hood Tax would lead to calmer marketsSimon Chouffot, August 6th 2011

A thousand economists agree on something – the Robin Hood TaxDominic Browne, April 14th 2011

Socialists win double victory on financial transactions tax and short sellingBen Fox, March 8th 2011

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