Does Lucy Powell support the Robin Hood Tax or the European Union?

Lucy Powell, the Labour Prospective Parliamentary Candidate for Manchester, is proud to be associated with the the Robin Hood Tax Campaign.  You will find Ms Powell proudly proclaiming this on her website, with pictures of her next to Glenys Kinnock and Arlene McCarthy MEP. Ms Powell also got a splash in the local South Manchester Reporter on 19th March 2010 campaigning on the very subject.

However, on the 1st April, the EU published a Commission Staff Working Document “Innovative Financing at a Global Level”, SEC(2010) 409 final. Before you yawn and drop to sleep, on the subject of Financial transactions Taxes it says

At least for a levy on currency transactions some legal aspects have to be considered. In relation to the original proposal by Tobin for a currency transactions tax legal obstacles were put forward by the ECB on its compatibility with the free movement of capital and payments between Member States and between Member States and third countries under Article 63 of the Treaty on the Functioning of the European Union (TFEU) (ex Article 56 of the Treaty Establishing the European Community (TEC)).45 Since the mechanism of a currency transactions levy is supposed to be based on taxing the net position of foreign exchange transactions, it could represent a restriction of the free movement of capital and payments (Article 63 TFEU). Besides the effect on the netting operation itself, it indirectly restricts underlying transactions, including those between Member States and with third countries, by rendering them more costly. It is unlikely that, for this restriction, a justification sufficient for the purposes of the Treaty could be found. Even if e.g. raising funds to benefit stability funding were to be considered as an overriding requirement of general interest, that requirement could not explain why transactions involving countries with different currencies would be treated less favourably than those involving only one currency. Furthermore, the tax is considered to be disproportionate as funds could alternatively be raised by other means of budget attribution without affecting a basic freedom of the Treaty and, in any event, because the scope of the tax would be unrelated to the risks to be covered by the tax revenue raised. Even a very low tax rate would constitute an infringement, and it would not be possible to establish a threshold of insignificance.

Which translated into simple English means that a Robin Hood Tax is illegal under European Law.

So a simple question for Ms Powell.

Do you, Ms Powell, as Labour PPC for Manchester Withington support

a) The Robin Hood Tax?

OR

 b) The Labour Party’s Policy on support for the European Union?

I think that the voters have a right to know before May 6th

Is Lucy Powell the right candidate for Manchester Withington?

Lucy Powell has some of the qualities to make a good politician. In particular she is hard-working and believes in the cause. However, there are two debilitating hurdles she needs to overcome. (see also here)

First, is that she stands for a political party that has undermined public services for a generation. By creating a structural deficit in the boom years, by my estimates, up half the National Debt of £1400bn in 2014 will be due to Labour’s policies, with less than a fifth the hang-over of the world recession.

Second, one of the worst aspects of the present government is failure to admit when their errors and learn from that experience. In the wake of defeat of the Manchester Congestion Charge by 4 to 1, Ms Powell wrote in the Guardian on 12th Dec 2008

 “Even after a big public information campaign, the basic facts of the proposed scheme just didn’t get through. It was a complex set of proposals, which were not readily understood. There remains much confusion and misunderstanding about them.”

I suggest, after an enormous expenditure of public money to vote in favour, people understood exactly what was proposed. Though only 20% of adults would have paid the charge, there were loads of voters who know someone who would be. Like donating to disaster relief, lots of people sacrificed a little to help a minority a lot. It would be a mark of political maturity for Ms Powell to recognise this aspect.

Update – Ms Powell’s strong support for the congestion charge caused her to make a little video.