Livingstone: Tax the bankers until the pips squeak

Ken's ideas to shore up the UK economy won't win him many fans in the Square Mile.

Last Updated: 31 Aug 2010
As George Osborne announced a raft of cuts in his emergency Budget, there were the inevitable voices of dissent, each reckoning they could do better than the wet-behind-the-ears Chancellor. One such critic is likely to have been ex-Mayor of London Ken Livingstone, who is hoping to run again as the Labour candidate in 2012. When MT asked him what he’d do if he were in charge of the country’s purse strings, he said he’d ‘go for balance’ and hike up taxes in the financial services sector, in order to preserve government departments from swingeing cuts. Doesn’t sound all that balanced to us…

Ken’s proposal is simple: impose higher taxes both on bankers and on the financial services sector as a whole. And if the bankers complain? Tough. Livingstone doesn’t have much patience with the City’s high-earners. ‘They are whingeing because the top rate of tax is 50% on more than £150,000, but I’d happily go to a top rate of tax of 90% on earnings of more than £200,000’. A terrific incentive to succeed, we’re sure you’ll agree.

The other problem with such stringent measures, of course, is the possibility of a City exodus, with Square Mile staffers threatening to flee to tax havens such as Switzerland to count their cash. ‘And we’d be well shot of most of them,’ roars Livingstone. ‘These people are very good at making themselves sound like God-like beings, but they led us into the worst economic disaster for 60 or 70 years.’

Harsh words indeed, but as far as the former GLC leader is concerned, London’s future doesn’t lie within the financial services sector anyway. In fact, he believes that the economic downturn has caused so much damage to London’s standing that it ‘will never be quite as predominant as an international financial centre again’. So what will take its place? Green tech, he says. ‘As the world wakes up to how bad a mess we’re in [environmentally], there will be a huge market for high-tech green technologies.’

Livingstone is well aware that his views will be anathema to some. But he doesn’t appear to care. ‘If you’re a politician and you want approval you should be in another job, because people will criticise everything you do.’ He says he is often struck by the number of people who want approval and go into politics. ‘This is a really bad career choice,’ he reckons. ‘They should go and be a singer or something’.

While Livingstone’s idea of making London a hub of clean technology might sound attractive, his willingness to write off the City’s finest altogether seems a little over-the-top. Let’s hope he’s not counting on votes from the Square Mile in two years time.

Ken Livingstone is the latest subject of ‘If I Could Start Again’, in the July/ August issue of MT. Click here to read his exclusive thoughts on fossils, politics and Margaret Thatcher...

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