What to make of Gordon Brown’s conversion to the Tobin Tax?

“Very substantial drawbacks.” “Big problems attached to it.” “It is very difficult to advocate a tax that has been, in a sense, rejected by the person who put the proposal forward.”

Just three of the observations that Gordon Brown has made in the past about the Tobin Tax. All the more surprising, then, that the Prime Minister should have come out in favour of it in a surprise speech at this weekend’s G20 Finance Ministers – at least until fierce opposition from Tim Geithner forced the UK to back off. (No mention of the idea in Gordon Brown’s FT op-ed on financial institutions this morning, you’ll notice.)

Now that the dust is settling, two questions stand out. First, why the Damascene conversion? And second, how – if at all – does this alter prospects for implementation of the tax?

Start with the reasons why.  Of course, some argue that Brown’s endorsement of the idea is no more than ‘tough on banks’ political positioning. Fraser Nelson, for instance, sees it as “the desperate vote-seeking move of a Prime Minister who knows he’s going down”. Beating up on the banks may be part of the story, but it doesn’t sound convincing enough on its own: you have to wonder whether anything as nerdy as an international currency transaction tax is really going to resonate with the public at large.

John Hilary, the Executive Director of War on Want – the UK NGO that, more than any other, has led the charge on the Tobin Tax – argues that to understand the move, you have to look further back than FSA head Adair Turner’s advocacy of the idea in August: back, in fact, over the last two years, during which several European governments (in particular Norway and latterly France) have been analysing the Tobin tax in detail.

Two weeks ago, John told me this morning, French Foreign Minister Bernard Kouchner hosted the first meeting of a new Task Force on international financial transactions (terms of reference here), which Financial Secretary to the Treasury Stephen Timms attended for the UK. When John met Stephen Timms after that meeting,  Timms told him that the UK’s previous resistance to the tax had been misplaced – and the UK was now on board.

Now, you might think that Timms’s reversal of long-standing HM Treasury policy was probably the result of prodding from Downing Street, and you’d probably be right.  But that’s not at odds with the proposition that Brown’s reversal is primarily because he’s become persuaded of the idea’s merits and feasibility. After all, Brown has more form on global Marshall Plan ideas than most: whatever reservations people have about his International Finance Facility (and I have a few), you can’t doubt the seriousness of his personal commitment to the idea.

As to the style of the announcement (of which Chris Giles justly observes, “just imagine if Tony Blair had arrived uninvited when Gordon Brown was chairing a G7 finance ministers’ meeting and upstaged the agenda by talking about things that had been kicked into the long grass. Brown would have exploded”): well, since when did Gordon Brown ever unveil radical new global proposals in a consultative way?

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More climate debate frenzy

Wow, who says democracy is dead? The nay-sayers should check out this incredible debate on the crucial issue of the day – climate change – which happened on November 5 in 2009. And like that famous day 404 years ago, the debate threatened to blow the roof off parliament!

Well, er, not quite. In fact, the video which the BBC’s Democracy Live website has helpfully put up begins with a surreal three minutes of mind-crushing banality, in which the Speaker goes through a list of 20 questions and asks of each one, ‘Debate to be resumed on which day?’, at which a grey-haired lady stands up and says ‘Thursday week, Mr Speaker’, and so on, and on, and on.

Finally, Ed Miliband stands up and we get the big debate on what the UK is going to do to help developing countries cope with climate change, and the combined members of the House – all fifteen of them – engage in half an hour or so of completely dismal and uninterested debate. Electrifying.

Dubai…believing is seeing

‘Call it the power of inevitability’, scroll the white letters on a black background, as a woman wails in Islamic fervour. ‘You know you have to be here.’ Cut to a speedboat racing across the bay towards a mighty skyscraper. ‘Believing is seeing’, flash the white letters.  A sports car approaches the skyscraper, and a dapper figure climbs out. It’s…it’s Tyler Brûlé!

No, it’s the latest advert for the Trump Tower in Dubai, one of the many vanity real estate projects announced in the boom years, that have now hit the rocks. ‘The thrill that every whim will soon become a reality’, the advert coos. Well, maybe not that soon. Local developer Nakheel, owned by the Dubai emirate, is struggling to pay back its $10bn in debt, and may have to be bailed out by the UAE government. Its Palm Deira and Waterfront projects, once planned to be bigger than Hong Kong, have also been delayed.

So too has the Pad, a high-tech residential complex built by Omniyat, in which each apartment would be ‘intelligent’, which means, apparently, it would monitor residents’ body temperatures and their taste in entertainment, so your apartment would know when you bring back a girl, and would intelligently turn up the temperature, dim the lights, and play Barry Manilow. Alas, the developers proved slightly less intelligent than the apartments, and the project has been delayed.

So many new properties are coming onto the market in the next two years, that Nomura estimates 150,000 jobs would need to be created to fill all the new office space. Alas, the trend is going the other way – Jones Lang La Salle estimates the population of Dubai will fall 10% this year.

Still, analysts are optimistic that Dubai will remain the main financial and trading hub for the Middle East, despite the best efforts of Riyadh, Doha, Beirut and Manama to challenge it. There’s no booze in Riyadh, Doha is incredibly boring, Manama is even less financially transparent, and Beirut is constantly being dragged to war by Hesbollah.

So the Biblical prophecies of the collapse of Dubai are unlikely to come true in the near future, much to the disappointment of Simon Jenkins, who started foaming at the mouth at the prospect earlier this year:

This off-the-shelf city state has been built on laundering the profits of oil, drugs, arms and western aid, he raved [western aid? shurely not]..the towers of Dubai will become casualties not of human greed but of architectural folly. Their lifts and services, expensive to maintain, will collapse. Their colossal facades will shed glass. Sand will drift round their trunkless legs. Animals will inhabit their basements.

Thousands of residential properties, if occupied at all, will be squatted by a migratory poor, like the hotel towers of the Spanish littoral or Corbusier’s blockhouses of Chandigarh in India. Refugees will colonise the camps where Indian workers have lived as they built Dubai. Gangs will seize the gated estates and random anarchy will rule the soulless boulevards.

If it is lucky Dubai will at least be a refuge from the political cataclysms that could engulf countries such as Pakistan, Iran, Iraq and Saudi Arabia. But mostly the dunes will reclaim the place. In centuries to come, tourists will share with Ozymandias the message: “Look on my works ye mighty and despair.’” With Shelley they will see how, “round the decay /Of that colossal wreck, boundless and bare /The lone and level sands stretch far away.”

Not a big traveller, are you Simon? 

On the web: grumbling about world politics, Europe, the US economy, and Palin’s speeches…

- The former British Governor of Hong Kong, Chris Patten, explains why he’s not grumpy about the current state of international politics – perhaps an outside candidate for the role of EU Foreign Minister? Le Monde diplomatique, meanwhile, suggests that the path to Lisbon has emphasised the gap between European governments and their citizens.

– John Gapper takes a look at Warren Buffett’s $27 billion deal to buy the railroad company BNSF, and explores what the “Sage of Omaha’s” latest move says about the basis of US economic recovery. Harold James, meanwhile, assesses the current state of monetary policy following the financial crisis, suggesting that we may be heading towards “international monetary chaos”.

– Elsewhere, the Daily Beast reproduces the “lost” victory and concession speeches that Sarah Palin never gave on election night one year ago – making for interesting reading indeed.

– Finally, over at Oxfam, Duncan Green laments the familiar refrain of NGOs, international institutions and governments alike to the need for “political will” and “good governance” when trying to achieve reform. Greater investment in “political literacy” and deeper “power analysis” instead, he suggests, should underpin attempts to bring about such change.

All we are saying is… assist countries emerging from conflict to achieve sustainable peace in a coordinated manner!

A press release from the UN…

NEW YORK, Nov. 3 /PRNewswire/ — To celebrate the unifying spirit and 40th anniversary of the Plastic Ono Band’s universal anthem, “Give Peace a Chance,” Yoko Ono, Sean Lennon and Julian Lennon have partnered with EMI Music and Sony/ATV Music Publishing to donate net proceeds from the sale of a commemorative 40th Anniversary digital single to the United Nations Peacebuilding Fund (PBF). Beginning today, iTunes will exclusively offer the single’s special anniversary edition for download purchase, with net proceeds benefiting the PBF through December 31.

Says Yoko Ono, “I am thrilled that so many in the music business are readily supporting ‘Give Peace a Chance’ on its 40th anniversary. It is indeed a time when we are all getting more aware of the necessity of doing something to achieve world peace, no matter how small. Thank you, thank you, thank you. I feel deeply that we are all one, regardless of where we stand.”

“I am delighted to see that a song so closely identified with the pursuit of peace, will shine a light on the United Nations’ peacebuilding efforts and financially support PBF projects,” the Chairperson of the United Nations Peacebuilding Commission (PBC), Ambassador Heraldo Munoz of Chile said.

Thank you, Yoko (thrice over). Just in case any pop pickers are not fully informed about the groovy activities of the PBC, the press release explains:

The PBC and the PBF were established after the 2005 World Summit to create mechanisms to assist national authorities in post-conflict countries build sustainable peace. The PBC is an intergovernmental body that brings together relevant actors, including donors, Member States, international financial institutions (such as the World Bank) and national governments. By creating this broad platform, the PBC plays a key role in ensuring that the international community can assist countries emerging from conflict to achieve sustainable peace in a coordinated manner.

So, not to be confused with the artiste’s Peace Tower, a beam of light that shines over Rekjavik every year to commemorate John Lennon’s death:

Imagine all the people, coordinating life in sustainable peace…

How a good outcome might yet be salvaged from the UK drugs row

The row in Britain over the sacking of Professor David Nutt, until last week the head of the head of the government’s Advisory Committee on the Misuse of Drugs (ACMD) shows little sign of abating: two members of the Committee have quit in Nutt’s support, and there’s talk of a mass resignation when the Committee meets on Monday. The reason for all the hoo-hah: Nutt’s public argument in a lecture (and a subsequent article) that the government had overstated the dangers of cannabis (as well as other drugs, like LSD or ecstasy), and that an evidence-based approach that prioritised harm reduction would see tobacco and alcohol as higher priorities.  As he argued in his article,

I think we have to accept young people like to experiment, and what we should be doing is to protect them from harm at this stage of their lives. We therefore have to provide more accurate and credible information. We have to tell them the truth, so that they use us as their preferred source of information. If you think that scaring kids will stop them using, you’re probably wrong.

This was anathema as far as Alan Johnson was concerned, who promptly sacked Nutt on Friday last week, arguing that

Professor Nutt chose, without prior notification to my department, to initiate a debate on drugs policy in the national media … accusing my predecessor or distorting and devaluing scientific research. As a result, I have lost confidence in Professor Nutt’s ability to be my principal adviser on drugs.

More or less the entire UK scientific community is now up in arms about Nutt’s sacking: thus for example Lord Krebs, former head of the Food Standards Agency:

I thought it was an appalling decision and totally inappropriate … it will send shockwaves through the scientific community and make it more difficult for the government to recruit the best people to help with scientific advice to underpin public policy … not one person … has been other than horrified about it and feeling that this called into question the whole validity of the government’s approach to independent scientific advice.

While I don’t disagree with Krebs (and see also this interesting critique of government policy by a former Home Office civil servant), there is one dimension to all this that is inescapably political rather than scientific: the need to provide Alan Johnson with some kind of face-saving exit strategy that also safeguards the place of science in the policymaking process – and, ideally, nudges the UK towards an approach to drugs control that is at least slightly more sane.

Right now, after all, we have a situation in which the Serious Organised Crime Agency trumpets that its work has “sent cocaine prices soaring” – but the actual effect is that dealers’ profit margins are increasing, while the product they sell becomes less pure and more dangerous; in which Portugal’s strategy of decriminalising all drus has proved “a resounding success” according to a recent independent study – but other European governments don’t want to know; and above all, in which countries like Mexico, Guinea-Bissau and Afghanistan carry the can for OECD governments’ refusal to face facts, and slide ever closer to becoming hollowed-out or outright failed states. 

So how to start to reorient drugs policy – given that, as Alan Johnson has just demonstrated so clearly, politicians manifestly feel unwilling or unable to persuade the public of the need for a more rational and effective approach?

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