Bloomberg News

Archbishop Backs Campaigners’ Demand for Tobin Tax Debate

November 02, 2011

(Updates with U.K. Chancellor comment in fourth paragraph.)

Nov. 2 (Bloomberg) -- The Archbishop of Canterbury, Rowan Williams, backed calls by the Occupy London protesters camped outside St. Paul’s Cathedral for the government to consider a global tax on financial transactions.

Public discussion is needed on the merits of the so-called Tobin Tax compared with alternatives, such as the U.K. government’s preference for a tax on bank assets, as well as other changes to the financial system, according to Williams. The head of the Anglican church wrote an article on his website which was published in the Financial Times today.

“These ideas do not amount to a simplistic call for the end of capitalism, but they are far more than a general expression of discontent,” Williams said. “If we want to take seriously the moral agenda of the protesters at St. Paul’s, these are some of the ways in which we should be taking it forward.”

Global finance ministers don’t support the European Union’s proposal for a tax on transactions, Chancellor of the Exchequer George Osborne said in a letter to banks two days ago. In September, the EU proposed a financial-transaction tax that would take effect in 2014 and raise about $57 billion euros ($78 billion) a year. The Tobin Tax, which applies a levy on trading of securities, was promoted by U.S. Nobel Prize-winning economist James Tobin.

Legal Action

The Occupy London campaigners started their protest two weeks ago following a wave of similar demonstrations in the U.S. The cathedral, the most iconic church in the main financial district, yesterday dropped plans to take legal action against the protesters. The City of London Corporation, the municipality overseeing the district, suspended issuing eviction notices.

The London protest against bank bailouts, bankers’ pay and cuts in government spending followed the similar Occupy Wall Street campaign in the U.S. where demonstrators have been camped in Zuccotti Park near the World Trade Center site since Sept. 17, calling for greater economic equality. The campaign has since spread to four continents.

Last month’s closure for six days of St. Paul’s, designed by Sir Christopher Wren and completed in 1710, was the first time it had shut its doors since the German bombing campaign in World War II. The closure, prompted by health and safety campaigners, eventually caused three clerics associated with the running of St. Paul’s to quit over the handling of the protest.

Proposals made by the Vatican last month for the recapitalization of banks and a separation of retail banking from speculative transactions also needed to be publicly debated, Williams said.

‘International Consensus’

Following a meeting of finance ministers in the Group of 20 countries, it was clear that the “necessary international consensus” to implement a global transactions tax doesn’t exist, Osborne said in a letter obtained by Bloomberg News.

The U.K. Treasury denied it is opposed to such a tax in principle. The government would “continue to engage with its international partners” on the idea, a Treasury spokesman said in an e-mailed statement.

The corporation will reconsider its decision to pause in its attempts to get the protesters to move “within the next seven or eight days,” Stuart Fraser, who heads its policy committee, said in an interview yesterday.

It is doubtful whether the situation will be resolved by Remembrance Sunday on Nov. 13, unless the protesters move off the public highway on to cathedral land, Fraser said.

“What we want to do is have a discussion with the protesters,” Fraser told the British Broadcasting Corp. today. “Can they accommodate our desire to clear the public highway? That’s all we’re asking.”

Sales Hurt

The London protests have hurt businesses located near the cathedral, with sales at Paternoster Chop House near St. Paul’s and the London Stock Exchange falling 40 percent, manager Gerhard Jacobs said on Oct. 25. Stores and restaurants in New York have also reported a decline in revenue.

Glasgow City Council will return to court tomorrow to try to move protesters who have been outside the city chambers since Oct. 15. Letters of expulsion have already been issued. The campaigners have so far refused offers of alternative venues, a spokesman for the municipality, who declined to be identified, said in an interview.

The municipality wants to resolve the issue ahead of Remembrance Day commemorations on Nov. 13, the spokesman said.

--With assistance from Stephen Johns in London. Editors: Peter Branton, Tim Farrand

To contact the reporter on this story: Peter Woodifield in Edinburgh at pwoodifield@bloomberg.net.

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net.


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