Wednesday, 2 November 2011

Cameron rejects Robin Hood tax

David Cameron has backed Rowan Williams's call for responsibility from top earners, telling MPs the archbishop of Canterbury "speaks for the whole country".
Writing in the Financial Times on Wednesday, Williams addressed public frustration at the financial sector's "business as usual" approach, which he said was represented by "still soaring bonuses and little visible change in banking practices" while society as a whole pays for banks' past errors and irresponsibility.
The prime minister drew on the archbishop's comments as he clashed with the Labour leader, Ed Miliband, over the economy in the Commons.
Miliband told Cameron something needed to be done about top pay, highlighting figures showing that directors' pay had risen by 49% over the last year, when many people have seen their wages frozen.
Cameron said he agreed that corporate greed should be curbed, adding: "The archbishop speaks for the whole country when he says it is unacceptable, in a time of difficulty, [that] people at the top of our society are not showing signs of responsibility.
"It's this government that's consulting about proper measures to make sure we get transparency in terms of boardroom pay, proper accountability, more power for shareholders – all of those things we are doing."
But he refused to back an EU-wide financial transaction tax – the so called Robin Hood tax – unless it was adopted on a worldwide basis.
The Green MP Caroline Lucas asked Cameron whether he was prepared to be a "leading advocate" for the tax at the G20 summit later this week and to ensure the revenue was earmarked to tackle sustainable development. The prime minister replied: "There is widespread support for the principles behind such a tax, but it has to be adopted on a global basis."
He added that there was "quite an important warning to those who are pushing this so hard", saying: "We must be careful that we don't allow other countries, including some other European countries, to use a campaign for this tax that they know is unlikely to be adopted in the short term as an excuse for getting off their aid commitments.
"We in this House, in this country, can be proud of the fact we are meeting our aid commitments. Don't let others use this tax as a way of getting off things they promised."
In his article for the FT, Williams aligned himself with the anti-capitalist protesters camped outside St Paul's cathedral, listing the tax as one of the measures that could advance their aims.
He also suggested separating the retail and trading arms of banks and placing more obligations on banks that had been recapitalised with public money.
His comments came after the cathedral announced that it no longer planned to take legal action against the demonstrators, who have been camped outside the landmark for over a fortnight.
Williams said the Occupy London Stock Exchange demonstration was an "expression of a widespread and deep exasperation with the financial establishment".
He wrote: "There is still a powerful sense around – fair or not – of a whole society paying for the errors and irresponsibility of bankers; of messages not getting through; of impatience with a return to 'business as usual', represented by still soaring bonuses and little visible change in banking practices."
Miliband asked about the fair pay review – commissioned by Cameron – which recommended in March that the government should ensure, by January 2012, that every top company published how much its highest earners received in comparison with average earners. He said this was "the least we should expect".
But Cameron declined to give a direct answer. He said that, unlike the last government, "who did absolutely nothing", the coalition was consulting on "a whole series of steps to bring responsibility to the boardroom".
He added: "We are a little bit wary about accepting lectures from a party that told us they were 'intensely relaxed' about everyone getting filthy rich, and that had a capital gains tax system that meant people in the City paid less tax than a cleaner."
Miliband told him: "The truth is you have sat on Will Hutton's review for the last nine months and you have done nothing about it. That's why the recommendation is not going to be implemented."
He also hit back at accusations about Labour's record on top earners and bank regulation, saying the previous government had introduced the 50p top rate of tax "that you and your chancellor want to abolish".
Miliband began the exchange by asking Cameron whether the latest growth figures of 0.5% in the three months to the end of September and unemployment at a 17-year high "point to the success or failure of your economic plan".
The prime minister conceded that "everybody wants the British economy to grow faster", but pointed out that the latest figures had been better than many people had expected, saying: "Isn't it noticeable that you cannot even bring yourself to welcome news like that?
"There is a global storm in the world economy today, and it is in our interest to help others confront that global storm – but we've also got to keep the British economy safe. We won't keep the British economy safe if we add to our deficit, add to our debt and put interest rates at risk."
Miliband said Cameron had blamed Labour, Europe and cabinet colleagues for the state of the economy. "When things go wrong, it's never anything to do with you," he said, but Cameron responded that Labour had left "record debts" and a "record deficit".

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