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04 Sep 2009
Business's representative head Richard Lambert has dismissed the idea of introducing a Tobin Tax.
Speaking at the CBI's annual north east dinner in Gateshead, director general Lambert said that a tax on transactions, suggested by Lord Turner, could not work unless introduced across the world at the same time.
"You may or may not be in favour of a Tobin-style tax on financial transactions: for the record, I am definitely not," said Lambert.
"But as Adair Turner himself acknowledges, you’d have to be mad to impose such a levy unilaterally without it being imposed at the same time in the rest of the world. Since there is no chance of this happening, this is not a point on which to linger.”
The key issue to deal with at the moment was extending credit lines through to SMEs.
"We’ve all heard the horror stories about businesses running into brick walls at their banks. Given the savagery of the credit shock, it’s no wonder that companies have been battening down the hatches and doing everything they can to reduce credit risk."
Lambert also said that financial services remuneration as a whole had not increased as much as in the public sector.
"It’s true that the contribution of the sector as a whole to gross value added across the economy picked up in the years ahead of the recession. But on the most recent figures, the share still stood at no more than about 8 per cent, which is roughly where it was in the late 1980s.
"Expressed in a different way, total pay of financial services employees represents a bit less than 4% of GDP. For comparison, the public sector equivalent is over 16 per cent. Which figure is too big?”
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Visitor comments Add your comment
Contribution of the public sector
Is 16% of pay going to the public sector too much compared with 4% going to the financial sector.
Hm, let's see what the public sector does - it looks after our health, it educates our children, it fights our wars, it cleans our streets, etc etc.
What does the financial sector do? It loses our investments and produces no net return on equities over 12 years.
Posted by: Mike Page, 04 Sep 2009 | 00:00
Tobin Tax
I suggest that the headline "trashed" is sensational and misrepresents the substance of Lambert's speech; i.e.the tax would have to be introduced worldwide.
Posted by: John Struthers, 04 Sep 2009 | 00:00
Credible and necessary to fight poverty
The idea deserves far more respect from Ricahard Lambert. Just a 0.005% tax would generate up to around $50 billion per year - an innovative source of ongoing development finance that could make the difference between life and death for the 500 million women a year currently dying through lack of an adequate health service. A strong international campaign is developing for a currency transaction levy for health care. It has growing political support at senior levels (eg France). The 0.005% levy is nothing like the level originally proposed by Tobin and is completely feasible. Poverty will never be addressed if ideas like this are dismissed so readily out of of hand. The world needs and deserves far better from Richard Lambert.
Posted by: Martin Drewry, Director of Health Unlimited, 07 Sep 2009 | 00:00