|Previous Section||Index||Home Page|
Clare Short: That is important. Americans are generous individually, but America is very mean in its contributions to international development. The richest country in the world is also the meanest, as it contributes only 0.1 per cent. of gross national product, so we do not want to imitate that. Charitable giving by individuals is good, but Governments must fulfil certain obligations, because some things only Governments can do.
My hon. Friend the Member for South-West Devon (Mr. Streeter) put the second point again and again, and it is an important one. This country leapt forward when it introduced good governance, whereby it began to pay judges and civil servants properly and started to root out corruption. That is achievable today elsewhere, and if we divert more resources in that direction, we will do much.
Mr. Harry Barnes (North-East Derbyshire): There has been a lot of talk about consensus from the hon. Member for Gainsborough (Mr. Leigh) and others. I suspect that part of the consensus in the Chamber is due to the fact that there is a great deal of admiration felt between the Select Committee and the Department for International Development, and that they often see eye to eye. Indeed, the Select Committee agreed on 32 items out of 42 in one departmental report. The consensus goes beyond that in many respects, but I suspect that there is no overriding consensus. This could be a bit like those Venn diagrams that interlink: the area in the middle represents the part where everyone agrees. To a great extent, that is the area that we have been discussing. However, the contents of the other areas of that diagram might enliven our understanding.
I am not going to cause discontent by discussing the issues on which I have a difference of opinion. I want to use this opportunity to concentrate on one item, although I hope that my right hon. Friend the Secretary of State and the House will not think that I am just a single-issue campaigner with no other ideas, or that I do not want to link my remarks to a wider analysis of the subject.
Paragraph 36 of the report that the International Development Committee recently produced on the globalisation White Paper referred to the Tobin tax. It pointed out that a number of submissions had been made
International currency speculation involves exchanges of money worth up to $1.5 trillion a day, mainly unrelated to trade in real goods and services. Instead, it involves the advantage to be gained from trading in other people's currencies. Many of the problems of disruption in the third world have often been associated with earlier occurrences of currency speculation. In fact, the economic causes of the break-up of Yugoslavia should also be examined in terms of its then currency problems. Such problems can create social disruption and allow people with extremist ideas to find a ready market for their particular approach.
Those speculative currency flows undermine the powers of national Governments and regional blocs, and create massive instability. Tobin suggested that a small levy of 0.25 per cent. on those speculative transactions would dampen down the scale and scope of speculation, and raise a substantial revenue of $250 billion a year. Those revenues could be used for the very purposes that we have discussed today: they could be devoted to health care, environmental protection and other forms of development. I suppose that this is a bit like the tax on smoking: the tax does not end smoking, but it raises revenue. As long as globalisation produces the gains that it is currently producing--for that is the reality--there will clearly be a huge opportunity for the raising of funds.
The levy would have to be universal, or nearly universal, and safeguards would be required to minimise diversion. At present the proposal is backed by the Canadian Parliament, the Belgian Parliament, the Finnish Government, the Indian Prime Minister and the Swedish deputy Prime Minister, as well as George Soros. The campaign in this country is led by War on Want, and 144 Members of Parliament--on a cross-party basis--have signed an early-day motion supporting the measure.
I should like the Government to take the lead on the Tobin tax in the way they took the lead on debt relief. That strategy is not operating fully yet, but we played a large role in connection with it. We have led the argument internationally, and have made some distinct achievements.
The Secretary of State's responses to the Select Committee suggest that the Department for International Development is rather more sympathetic to the issue that we are discussing than the Treasury. Perhaps it is just as well that I am now pushing at a half-open door. One of the Treasury's many objections is that speculation would go offshore, and that evasion would result from the refusal of certain areas to agree to provisions that might operate in some major dealing countries.
About 12 countries could be linked with the proposal, which might tie down a great deal of world development. It would limit scope for evasion, and onshore organisations could be registered so that guarantee payments were legally protected. Electronic processes relating to trade would make the taxing of currency transactions relatively easy to administer, and would reduce the possibilities of tax evasion. Stock exchanges themselves could refuse to trade or quote with those dealers or rogue areas.
The Treasury has produced another set of objections, which were presented to me following a meeting during which, along with the director of War on Want and others, I visited the Economic Secretary to the Treasury. It was suggested that four of our proposals were already being dealt with, which, in my view, did not rule out the principles involved in the Tobin tax.
Alternatives were offered. The Government emphasised the existence of codes and standards which could deliver transparency and accountability, and which covered fiscal policy, financial and monetary policy, corporate governance, best practice for financial institutions and the surveillance machinery that should be associated with that, on an international scale. If the Government can advocate such policies, there is surely no reason why they should not accept our argument about the Tobin tax.
The Government propose bringing together the International Monetary Fund, the World Bank and key regulatory authorities in a financial stability forum, which would tackle many problems relating to instability in world markets. They have stressed two points that are very third way and new Labour: partnership needs to exist between the public and private sectors on an international scale and there needs to be agreement with the G7. I might not be into the mixed economy or an advocate of it, but I am realistic enough to realise that we must operate in the world as we find it, rather than as we would like to find it, although sometimes, as well as making concessions to reality, we should mention what we are after.
The Government have also said that new social principles should come to the fore of the work of the World Bank and the United Nations. That is equivalent to the principles on freedom of the market and social justice which are also advocated by the third way. They are now projected on an international scale.
Those principles are relevant to the argument about the Tobin tax. We are approaching a general election. I believe that those parties that agreed to advocate that measure would win enthusiastic support. I note that what we consider to be our sister party in Northern Ireland, the Social Democratic and Labour party, has adopted the Tobin tax provisions.
I ask the Secretary of State to explain the situation in the UN. Kofi Annan helped to set up a panel to investigate the Tobin tax, but it is beginning to look as if it has been pushed to one side. Some of us believe that the decision that the panel will make on that tax is not that which we feel that it should adopt.
I appeal to the Government to take the matter on board. They cannot produce a tax on international currency speculation by themselves; it must be a matter of massive international agreement. The Secretary of State said that it might be something for our grandchildren to consider. I realise that it will not be introduced tomorrow, but I hope that we may make progress on it in my lifetime.