Thursday, 2 January 2014

Labour and the banks

Yet another example from Labour revealing its policies to be too similar to those of the Tories for comfort. When the banks pay billions less in tax than predicted by Osborne, Labour`s response is to argue that "its bank bonus tax would have been better at raising more money". They still don`t appear to get it, unlike the majority of the rest of the country, who are keen to make the financial sector pay for the economic problems caused by the 2008 crash.This is the one aspect of populism which Labour should support, and leave the others, immigration caps and welfare cuts, to the right-wing parties.
     Do Labour leaders think the electorate is ignorant of the £375bn of quantitative easing given to the banks, of the fact that this money was not loaned to businesses to kickstart the economy, ignorant too of all the scams, from mis-selling PPI and laundering Mexican drug money to fixing interest rates and manipulating exchange rates, of the huge profits banks make and the huge bonuses paid for "socially useless" work, and for increasing their "efficiency" by sacking staff and paying counter staff little? A far better response from Labour would be to pledge to increase the bank levy and to impose a massive bonus tax as well!
    As predicted, the EU`s cap on bonuses have led to a huge hike in many bankers` salaries, with, for example, senior staff at Goldman Sachs in London getting £2.7m in 2012, and those at JP Morgan a mere £2.0m As a result,  Labour should be considering an income tax rate of around 70%, similar to the one in France, on all earnings over £1m. As Polly Toynbee rightly says,Labour needs to remind voters that "tax is the price paid for civilisation", but that it does not necessarily have to be unfair. Letting banks and accounting firms off the hook definitely is, taxing the rich is not, and the sooner Miliband says so, the better!

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