Development network Stamp Out Poverty presents a ‘sterling solution’ to finally make poverty history. Is Britain up for the challenge?
David Hillman is a man with a vision. He wants to end poverty and he knows how to. As coordinator of UK charity network Stamp Out Poverty, his aim is to introduce a tax which could raise ₤1.7 billion revenue per year to aid developing countries, without damaging the economy of richer nations.
“It is a long term, predictable and sustainable strategy, and I think that Britain could and should take the lead,” says David.
The campaign is aimed at introducing a Sterling Stamp Duty of 0.005% on all sterling foreign exchange transactions which are traded in the United Kingdom. The duty would be collected in the United Kingdom and destined to attain the UN’s Millennium Development Goals by 2015, which are aimed at helping developing countries.
Moreover, it would also help to reach the government’s 0.7 % proposed target of Gross National Income (GNI) for Overseas Development Assistance (ODA). Up till now, only 0.4% of the proposed figure has been achieved. The government aims to reach the 0.7% target by 2013. But “when that target was proposed there was no problem of AIDS or global warming,” says David. “We have to act now to avoid the cycle of poverty repeating.”
Despite the currency market being the biggest in the world, it has remained exempt from taxation. If the tax was to be implemented, the payers would be the banking institutions, which could oppose this action regardless of the fact that the rate is so low that it would not have a negative impact on trade.
The main argument against it is that it is an avoidable tax. However, since the 2001 September 11 bombings, markets can not change and adapt like before because now they are very closely monitored.
Claudia Waller, Network and Communications Officer of Stamp Out Poverty says: “Since 9/11 you can’t move around paying such a tax in order to avoid it. The Bank of England is always aware of what is happening, so it is not a valid argument any more.” Consequently, David believes that now is the perfect time for the British government to demonstrate its commitment to provide aid to Third World countries. “From 2002 this is possible mainly thanks to regulation, centralization and the electronic nature of the market,” he says.
Nevertheless, managing the money obtained and making sure that it is invested adequately poses problems, as it could end up in the pockets of those who get their hands on it first. Dr Mark Duckenfield, lecturer of world economy politics at LSE, says that “if the UK government was to receive the money, for how long would it spend it on poor countries? Why not spend it on the British NHS or on the UK transport system? And if it went to an international organisation, could it be relied upon to spend it appropriately?”
There are also growing concerns on whether corrupt governments would get access to the money and use it for illicit purposes, instead of it being destined to fund development programmes. “Would the UK distribute the money to a bunch of governments that have a long record of not using aid efficiently, being corrupt and not having bureaucratic structures in place to handle so much cash?” says Dr Mark Duckenfield.
Those are risks David is willing to take. A formal proposal has been presented to the British government and is under current evaluation. But S.C, who spent 18 months working for Stamp Out Poverty, says: “Stamp Out Poverty is definitely going about it the right way, but I don’t think this will happen in the next couple of years. It is a radical step and Gordon Brown will never do it. England surely, is not going to be the first.”
Norway was the first country to become interested in the proposal. A report written by Stamp Out Poverty and commissioned by the Norwegian Ministry of Foreign Affairs was presented in February 2007 in Oslo. But after the acceptance of the Norwegian government to take on the initiative, it was turned it down before it was formalised.
Despite that, Peter Howell, member of the Labour party, who has known David Hillman for many years, says: “You have to keep being optimist. It’s the next big thing after the Make Poverty History Campaign. It’s a great idea carried out by a remarkable man.”
Stamp Out Poverty’s initiative is based on the Tobin Tax proposed 30 years ago by the Economist James Tobin, who suggested a 1% tax on currency transactions, a levy 200 times the one proposed by Stamp Out Poverty. The Tobin tax, which was going to be destined to fight against daily currency trading and speculation, was never approved. Stamp Out Poverty has adapted his idea to stop international poverty.
Obtaining funds to help the poor never had such a realistic and attainable solution. “Let us hope that we can make it all happen”, says David.
“It is a long term, predictable and sustainable strategy, and I think that Britain could and should take the lead,” says David.
The campaign is aimed at introducing a Sterling Stamp Duty of 0.005% on all sterling foreign exchange transactions which are traded in the United Kingdom. The duty would be collected in the United Kingdom and destined to attain the UN’s Millennium Development Goals by 2015, which are aimed at helping developing countries.
Moreover, it would also help to reach the government’s 0.7 % proposed target of Gross National Income (GNI) for Overseas Development Assistance (ODA). Up till now, only 0.4% of the proposed figure has been achieved. The government aims to reach the 0.7% target by 2013. But “when that target was proposed there was no problem of AIDS or global warming,” says David. “We have to act now to avoid the cycle of poverty repeating.”
Despite the currency market being the biggest in the world, it has remained exempt from taxation. If the tax was to be implemented, the payers would be the banking institutions, which could oppose this action regardless of the fact that the rate is so low that it would not have a negative impact on trade.
The main argument against it is that it is an avoidable tax. However, since the 2001 September 11 bombings, markets can not change and adapt like before because now they are very closely monitored.
Claudia Waller, Network and Communications Officer of Stamp Out Poverty says: “Since 9/11 you can’t move around paying such a tax in order to avoid it. The Bank of England is always aware of what is happening, so it is not a valid argument any more.” Consequently, David believes that now is the perfect time for the British government to demonstrate its commitment to provide aid to Third World countries. “From 2002 this is possible mainly thanks to regulation, centralization and the electronic nature of the market,” he says.
Nevertheless, managing the money obtained and making sure that it is invested adequately poses problems, as it could end up in the pockets of those who get their hands on it first. Dr Mark Duckenfield, lecturer of world economy politics at LSE, says that “if the UK government was to receive the money, for how long would it spend it on poor countries? Why not spend it on the British NHS or on the UK transport system? And if it went to an international organisation, could it be relied upon to spend it appropriately?”
There are also growing concerns on whether corrupt governments would get access to the money and use it for illicit purposes, instead of it being destined to fund development programmes. “Would the UK distribute the money to a bunch of governments that have a long record of not using aid efficiently, being corrupt and not having bureaucratic structures in place to handle so much cash?” says Dr Mark Duckenfield.
Those are risks David is willing to take. A formal proposal has been presented to the British government and is under current evaluation. But S.C, who spent 18 months working for Stamp Out Poverty, says: “Stamp Out Poverty is definitely going about it the right way, but I don’t think this will happen in the next couple of years. It is a radical step and Gordon Brown will never do it. England surely, is not going to be the first.”
Norway was the first country to become interested in the proposal. A report written by Stamp Out Poverty and commissioned by the Norwegian Ministry of Foreign Affairs was presented in February 2007 in Oslo. But after the acceptance of the Norwegian government to take on the initiative, it was turned it down before it was formalised.
Despite that, Peter Howell, member of the Labour party, who has known David Hillman for many years, says: “You have to keep being optimist. It’s the next big thing after the Make Poverty History Campaign. It’s a great idea carried out by a remarkable man.”
Stamp Out Poverty’s initiative is based on the Tobin Tax proposed 30 years ago by the Economist James Tobin, who suggested a 1% tax on currency transactions, a levy 200 times the one proposed by Stamp Out Poverty. The Tobin tax, which was going to be destined to fight against daily currency trading and speculation, was never approved. Stamp Out Poverty has adapted his idea to stop international poverty.
Obtaining funds to help the poor never had such a realistic and attainable solution. “Let us hope that we can make it all happen”, says David.
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