Prospect
Time to move the capital?
27th January 2010
In light of the fury surrounding MPs expenses and their failure to curb reckless banking practices, might this be a good moment for Prospect to dust down an idea from its December 2002 edition and once again call for our capital and national parliament to be relocated out of London?
Back in 2002 Prospect wrote of “Britain’s over-centralisation [in the southeast] of networks of power and energy,” and asked readers—somewhat tongue in cheek—to propose where parliament might best relocate. I suggested Stoke-on-Trent—among other things for its hub location, civic identity, cultural quarter and the boost to both business and to the badly decayed regional housing stock that such a move would bring.
After all that has transpired at Westminster since 2002, what shake-up could better purge and revitalise the national body-politic? By offering the electorate such an unexpected and uncompromising way of expressing anger and disillusionment with politics, Prospect could help to steal a march on the sinister forces bent upon exploiting that anger for less desirable ends.
Martin Bradley
Tamworth, Staffordshire
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Elizabeth Kirkwood
Warning signs: would increased regulation stifle or save the banks?
Following headlines over the past week about FSA chief Adair Turner’s comments in Prospect magazine on the “swollen” financial sector and his calls for a Tobin tax, we’ve gathered a diverse selection of opinions from industry experts and commentators to argue about Turner’s ideas.
Robert Kuttner, editor of the American Prospect, argues that a Tobin tax may be the only answer for the Obama administration and that, while Wall Street will no doubt protest loudly, Obama’s chief advisers may well back the idea. Early in his career, Larry Summers, Obama’s economic policy chief, was a supporter of the Tobin tax, as evidenced by a 1989 paper he wrote entitled: “When Financial Markets Work too Well: a Cautious Case for a Securities Transaction Tax.”
In contrast, the British economist Tim Congdon deems a Tobin tax “national economic suicide,” and instead asks: “Are we the British supposed to be anxious or ashamed that at least one part of our country is so fantastically productive?”
He adds, “Given that Britain’s financial services sector is so heavily an exporter it is ludicrous for Adair Turner to allege that the sector has grown too much. How can any export industry be too large for the country that hosts it?”
UBS senior economic adviser George Magnus believes that a Tobin tax would only destroy financial activity, arguing instead that “governments should summon the political courage to break up the largest banks… with the express purpose of introducing more competition.”
Meanwhile the Times’s Oliver Kamm is in no doubt that while the financial system is “broken,” a Tobin tax is not the answer. “There is no patriotic imperative to defend British banking… But the activities of the banks are far from valueless. The shame is that awesomely incompetent bankers were at the helm.”
“Even if the main financial centres were to apply a tax consistently, what incentive would offshore tax havens have to follow suit?”
Exclusive online responses from Tim Congdon, George Magnus, Oliver Kamm and Robert Kuttner
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