We’d like to share with you a press release from the newly launched Tax Justice UK for immediate release:
Britain’s Trade Unions Congress has published projections showing the increasingly unbalanced growth of the UK economy. As you can see from this map, economic activity is skewed in the direction of England’s south-east region, which includes London. It’s forecast to produce 40.1 percent of the UK’s gross domestic product by 2022. Given the importance of the City of London’s offshore financial centre to the region, this is a vivid demonstration of the Finance Curse in action.
In early September 2017, ten years after the collapse of UK bank Northern Rock, TJN will be publishing a special edition of Tax Justice Focus, guest edited by Professor Daniel Mügge (University of Amsterdam) which draws on fresh research from the EU-funded Enlighten programme. In this article Professor Mugge argues that faced with intractable problems of rising debt, and the obvious limitations to what financial regulators can achieve in the face of a hugely oversized financial sector, debt forgiveness must be added to the policy list if we are to avoid chaos in the global economy.
In our March 2017 Taxcast: the high price we’re paying for our finance sectors – we look at staggering statistics showing how the US finance sector is a net drag on their economy.
Also, as the British government initiates Brexit divorce negotiations to leave the EU, we discuss something they ought to know, but obviously don’t – they’re actually in a very weak position. Could it mean the beginning of the end of the finance curse gripping the UK economy?
Featuring: John Christensen and Alex Cobham of the Tax Justice Network, and Professor of Economics Gerald Epstein of the University of Masachusetts Amhurst, author of Overcharged: The High Cost of High Finance. Produced and presented by Naomi Fowler for the Tax Justice Network.
Download the mp3 to listen offline anytime on your computer, mobile/cell phone or handheld device by right clicking here and selecting ‘save link as’.
“If you look at particular finance centres, say London and New York, the problem is that the net cost of this system is quite significant, it imposes a cost not only on people who use finance but for the whole economy. So, what we need to think about is what are the more productive activities that ought to be substituted for these excessive aspects of finance?”
Professor Gerald Epstein
“We might be seeing the start of the end of Britain’s grip by the Finance Curse”
John Christensen, Tax Justice Network on Britain’s weak position in Brexit negotiations
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The Globalist has just published an article by Helmut Reisen, former Head of Research at the OECD’s influential Development Centre, in which he discusses the developmental impact of the recent fall in the value of sterling. He comes to similar conclusions to those we blogged last month; allowing the pound sterling to decline in value against other currencies might provide just the boost needed for other productive export sectors to thrive while at the same time reducing the size of Britain’s over-sized finance sector, which is overly geared to wealth extraction rather than wealth creation. In Reisen’s own words:
” . . a more competitive British pound and a reduced size of the country’s finance sector are definitely two things worth striving for.”
Our thoughts exactly, and we are pleased to see our Finance Curse analysis referenced in the article, since we have consistently cited the UK political economy as a case study of how an over-sized financial sector does more harm than good. Read more about the Finance Curse here.