Global Policy Forum

By Harry Barnes MP

Senior MPs from 6 parties urge Gordon Brown

A cross-party Commons group of senior backbenchers, including several former Ministers, is urging the Chancellor Gordon Brown to "take steps towards the introduction of an internationally co-ordinated Currency Transactions Tax." The MPs, from the Labour, Conservative, Liberal Democrat, Ulster Unionist, SDLP and Plaid Cymru parties support the growing international movement of academics and development activists for a Tobin Tax - named after the Nobel Laureate James Tobin. Their motion says that "International currency transactions total more than $1 trillion a day and that the vast majority of this is unrelated to the real economy of tangible trade goods and services" and has that "such enormous speculative flows have contributed to serious economic damage to countries and regions such as Mexico (1994), Southeast Asia (1997), Russia (1998), Brazil (1999) and Argentina (2001)"

The Tobin Tax is a small levy on such currency speculation which, the MPs believe, "could both dampen down the scale and scope of speculation and raise substantial revenues, potentially in excess of $50 billion each year, for projects targeted towards ending global poverty."

The MPs, who include former Foreign Office Minister, John Battle as well as former Conservative Minister Peter Bottomley, point out that Tobin "now enjoys the backing of a number of governments and parliaments across the world, including France, whose parliament recently passed a law authorising its implementation."

Tobin will be on the agenda of next month's UN Financing for Development conference in Monterrey, Mexico.

Tobin supporters are heartened by Gordon Brown's recognition that "that innovative ways need to be urgently found (including currency taxes) to finance development." The Chancellor recently issued a Treasury paper on a modern Marshall Plan for the Developing World which specifically cites the Tobin Tax as a possible new source of funding to tackle global poverty.

The European Finance Ministers have asked the European Commission to examine the practicalities of the proposal.

The Commons motion is being tabled by Labour's Harry Barnes who has persistently raised the issue in the Commons for several years. He said: "Tobin is an issue which has rapidly moved from the academic margins to the political mainstream in just a few years. There is a groundswell of support from high and low and around the world for a tax that could benefit the many at the expense of the few and kill two birds with one stone - by reducing currency instability and raising many billions for development. It's no longer a mere slogan on the progressive wish-list but a feasible proposal that commands serious support from the most surprising people, including the renowned currency speculator, George Soros."

Mr Barnes' motion has attracted the initial support of Peter Bottomley (former Conservative Northern Ireland and Transport Minister), Jenny Tonge (Liberal Democrat Spokesperson on International Development), Adam Price (Plaid Cymru), Lady Sylvia Hermon (Ulster Unionist Party), Eddie McGrady (Social and Democratic Labour Party), John Battle (former Labour Foreign Office Minister and member of the International Development Select Committee), Tony Worthington (former Labour Northern Ireland Minister and member of the International Development Select Committee), Tony Colman (Labour member of the International Development Select Committee, Helen Clarke (Labour member of the Environmental Audit Select Committee), David Chaytor (Labour) and Bob Russell (Liberal Democrat).

Mr Barnes tabled a Commons motion in support of the Tobin Tax in the last Parliament, which secured the support of 150 MPs, including the former Treasury Minister Geoffrey Robinson. Mr Barnes is hopeful of meeting if not exceeding this number when the motion is tabled next week.

The Commons motion is part of a concerted campaign led by War on Want to win backing for Tobin. Roy Hattersley is hosting a Commons reception on Tobin Tax Day on 13 March at which a cinema advert will be screened. The advert voice-over is being done by the actor Ewan McGregor to the music of Radiohead.

The text is as follows: Tackling Global Poverty EDM

That this House notes that International currency transactions total more than $1 trillion a day and that the vast majority of this is unrelated to the real economy of tangible trade goods and services; believes that such enormous speculative flows have contributed to serious economic damage to countries and regions such as Mexico (1994), Southeast Asia (1997), Russia (1998), Brazil (1999) and Argentina (2001); further believes that a small levy on such currency speculation, the Tobin tax, named after the Nobel Laureate who originated the concept, could both dampen down the scale and scope of speculation and raise substantial revenues, potentially in excess of $50 billion each year, for projects targeted towards ending global poverty; is pleased that this initiative now enjoys the backing of a number of governments and parliaments across the world, including France, whose parliament recently passed a law authorising its implementation; is heartened by the words of the Chancellor that innovative ways need to be urgently found (including currency taxes) to finance development; wishes the Chancellor a successful mission to the UN 'Financing for Development' conference in Monterrey, Mexico; urges him to take steps towards the introduction of an internationally co-ordinated Currency Transactions Tax, with the proceeds ring-fenced for international sustainable development objectives; and further urges the Chancellor to ensure that these proceeds do not replace either existing international aid disbursements, or agreed commitments to increase international aid.

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