Why not a one off wealth tax to save the world?

I think like everyone else this morning, switching on the news it was at first shocking to hear about the tax on savings accounts in Cyprus.  

I am less sympathetic to those with £100k plus in savings but the tax will include British troops and those with retirement nest eggs. There is also the risk of a widespread run on the banks but thinking about it, could this be the solution to austerity? 

I am reminded of this post I did last year (see link here) here about a report by the Boston Consultancy Group (BCG).  The report recommended an international wealth tax to wipe the debt slate clean and end the recession. 

Now the BCG are hardly bleeding heart liberals. Their plausible argument is that we have written off debt in this way before and a tax is actually in the interest of the wealthy.  Since instead of years or even decades of austerity, if this was to work and the world economy would grow then their assets would soon rise by more than they would have lost.  

A one off tax would also be much better to wealthy savers who are currently earning interests rates below inflation, so it would make sense for them to have a one off hit than lose more in real terms.

This could be progressive solution and even poetic justice since many of the wealthy made money from the debt bubble. Yet taking savings from the poor and vulnerable as they are in Cyprus is just wrong. This should be a tax on wealth (and not just bank account savings).

.By coincidence this came up at a recent pension meeting I attended where in a discussion about what we can do about the recession, I asked our advisers if they had heard of the report? (They hadn't) and this morning it is one of my top 10 of "Most Poplar" posts!

Bambos Charalambous and Stephen Twigg Campaign Fundraiser

A little late post on a very good fund raising dinner held on Tuesday evening for Bambos and Stephen’s Parliamentary campaigns.

The special guest was the Foreign Secretary, RH David Miliband MP.

I was there with UNISON Labour Link colleagues (including Rae Voller, the deputy Chair of UNISON Labour Link - see picture top right).

The event was packed with supporters many of whom had actually come down from Liverpool for the dinner.

It was held at the Ev Restaurant in Southwark, SE1. Bambos and Stephen were very hospitable and welcoming hosts to all their guests.

Some thoughts I scribbled down during the speeches.

David Miliband gave a very competent speech clearly pointing out that unless we win in seats such as Enfield Southgate and Liverpool West Derby we will not win the next general election.

He rightly praised Bambos and said he expected him at the next election to be the first ever Greek Cypriot MP.

At the same time he urged a bilateral solution to the problems in Cyprus so that both peoples there could live in peace in Cyprus as they do together in London. I was very surprised that there had not been a MP of Cyprus origin before now (Nick V - discuss!).

To great applause from the audience Miliband argued that the EU had encouraged Turkey to enshrine equal citizenship for all in its constitution and that was down in part to lobbying by the EU and the prospect of membership.

David was very direct and I think persuasive about not only the importance of the Labour Party winning power during the next election but also that it is still very winnable.

He reminded everyone how the Party had been written off during the early 90’s as being never able to win power. Also that there had been a failure of markets not the government that had caused the current economic mess.

New Labour is not a “faction” but a set of values, principles and a political culture. If there are good ideas regardless that they are from the Left or the Right they will size them. What matters is the good of the people. Politics is important since the NHS is important to most people, the minimum wage is important, and the vast increase in the number of teachers and teacher assistants are important.

Politics does make a difference.