Advice for Gordon Brown: get in touch with your Robin Hood side

When Margaret Thatcher left Downing Street, she shed a tear. I remember I wept a little too, but it was for joy. Now her natural successor is going too. 'Oh, I don't think we need worry about Tony,' she is reported as saying after the 1997 election, meaning among other things that Tony would continue to support the Americans in their world-wide adventures. Meaning too, no doubt, that Tony would never dream of interfering with the now well-established system of redistributing wealth from the poor to the rich, according to which corporate or individual wealth is measured in aggregates of poor countries - a celebrity business man is worth three poor countries, a corporation twelve. Tony has been, on the whole, a good Thatcherite, and there might well be tears at his departure too.

Let's be generous to Gordon Brown, and not presume that he will simply trundle along the same tracks as Tony. There might be a change of direction. He has not been short of advice from the media and others, but I have no hesitation in offering him a little more. The gist of it is this. At moments in his many pre-Budget and Budget speeches, we have glimpsed the Robin Hood in him - as he triumphantly announced the raising of the winter fuel allowance (or was that King Wenceslas?) or the introduction of pension credits. He seems to enjoy giving to the poor. Now he should cultivate the other side of his Robin of Sherwood persona: the art of taking from the rich.

Wealth inequality has reached grotesque levels. Throughout the world there are still a billion or so people living on a dollar a day or less. Sweatshop workers producing polo shirts or stuffed Disney characters - even though they are somewhat better off than dollar-a-day people - earn as little as 50c an hour, while the salaries of the chief executives of the companies they work for range from $1000 to $10,000 an hour. Of the 100 most wealthy economic organisations in the world, just under half are countries, and just over half are transnational corporations. This is where the world's wealth has gone. If world poverty is to be alleviated, we must get the money from where it is to be found in the greatest quantities.

The twenty-first century way of taking from the rich is to impose a Currency Exchange Development Levy (CEDL). The volume of speculative transactions on currency markets is such that a levy of 0.1% on profits would bring in $62 billion (£31.25bn) every year, if the UK alone were to implement the tax. A UN study has estimated that about $150 billion per year is needed to meet the Millennium Development Goals, including halving the proportion of people living in extreme poverty and hunger by 2015, ensuring primary schooling for all children, and reversing the spread of HIV/AIDS, malaria and other major diseases. If the UK were going it alone, it could raise over 40% of the MDG target sum. If the whole of the EU were to join in, the target could almost be met.

To say that 0.1% is not much to ask is an understatement. If Robin Hood had stopped a coach on the highway to Nottingham and had taken a farthing from each passenger, it would be daylight robbery by comparison. Yet the revenue even from such a low-level CEDL would, if properly applied, make substantial inroads into poverty in the developing world.

The tax would, of course, have to comply with the 'development' concept in its title. It could not be used to purchase nuclear submarines, or pay for the occupation of other people's countries, or even finance the Olympics. It would have to be 'ring-fenced' to finance projects related to world poverty reduction.

As soon as possible after the departure of Thatcherite Tony, Gordon Brown should take steps to implement a British CEDL on sterling transactions, and press for similar measures in the EU and even - through the G8 perhaps - in other parts of the developed world.

In the longer term, the government should go much further and consider how to set up a permanent global contract with business, a treaty between state and corporate powers, whereby sufficient wealth would always be redirected into vital projects. These would always include alleviating poverty, making safe water and essential medicines available everywhere in the world, and developing renewable resources.

That's for the long term - meanwhile, a UK-only CEDL is almost immediately feasible. It's a reasonable proposal which has been supported by leading experts such as the Nobel Prize winning economist Joseph Stiglitz. (Though, like every other progressive idea, it's opposed by the Sheriff of Nottingham, George W. Bush. Gordon should refuse to sign up as his deputy.)

One thing you can't deny about Gordon - he has a good head for economics. He will be very familiar with the concept of taxing financial speculation. If he were to take it on board, we would know there was a real change of direction.



Gordon, if there's anything you still don't know about CEDL, try these:

http://www.stampoutpoverty.org/
http://www.globalpolicy.org/socecon/glotax/currtax/index.htm