A tax for peace
By Harry Barnes MP

Bombing Afghanistan is a high-risk strategy. It could even lead to more serious political instability in neighbouring Pakistan — a nation that holds nuclear weapons. If the bombing is over the top, world opinion could swing dramatically. This would lead to key Islamic nations cutting off the very intelligence information that is needed for our defence and for us to eventually remove terrorist structures.

Given such fears, it becomes imperative that other aspects of the general strategy to topple the forces of Osama bin Laden and the Taliban are to the fore. These include moves to block the monies terrorists have salted away in financial institutions throughout the world — including in offshore tax havens. There is also the need for humanitarian assistance to feed Afghanistan and to meet the needs of masses of refugees. But, to quote Clare Short, we should go much further: ‘We need a massive international effort to reduce poverty and injustice and to promote development, democracy and human rights.’

Where can the massive resources needed for such a programme come from? Well, the wealthier nations of the west could dig deeper, with the writing off of ‘Third World’ debts, more resources for overseas aid and fairer trading arrangements to allow the poorer nations to sell us their goods and raw materials. But we all know that any such programmes are liable to be trimmed as the west seeks to tackle the recent problems of economic recession — such as the decline in our airlines. There is, however, a ready source of finance that is just waiting to be tapped. Currency speculation around the world stands at $1.5 trillion a day.

This speculation undermines economies and creates the conditions that breed extremism. An internationally organised tax upon this speculation — which also needs to tackle the offshore financial institutions — would raise massive funds in an international war on want. It would also partly dampen down such speculation, thus helping to stabilise economies throughout the world. The tax is known as the Tobin Tax after the economist who developed the notion. The case for such a tax is gaining ground throughout the world and is supported by 150 MPs on a cross-party basis. The new world situation should mean that the time has come for governments to get together to operate it. But, unfortunately, Tony Blair has rejected the proposal.

Yet it is a logical idea for the government to run with, given its own stance. Tony Blair recently pointed out that the economy should not ‘be run for speculators and currency dealers,’ whilst Gordon Brown said ‘we will play our part in mounting a humanitarian coalition to tackle the evil of global poverty.’ That coalition and non-domination by speculators makes the Tobin Tax a must. So my next move is to send a copy of this article to all government ministers in the newly formed War Cabinet.