A land value tax won’t save the amazon rainforest: Instead we should look to indigenous communities to lead the way

Recently, an article published on this site by one of my colleagues attempted to revive the concept of a land value tax (or Georgism) as the answer to environmental degradation, specifically the tragic and rapid destruction of the amazon rainforest.

This tax is supposedly an excellent counter to the “demonstrations and other forms of virtue signalling from the left”. Although I agree that demonstrations in the UK will do very little, I wholeheartedly disagree that free market reform policies, like a land value tax, will be either implementable or have any effect in combating what is essentially a market driven process. It’s neither pragmatic nor possible. Instead there is a far more practical and proven method to protect the rain-forest already at play and it lies in the inherent power of indigenous communities.

To address the proposal of a land value tax, which i will preface, is not an idea without merit in specific contexts, such as urban and suburban plots of land but in this context it has significant barriers to its implementation.

Firstly, the concepts of a land value tax and the eco-tax mentioned in the article are two fundamentally different financial tools and in order to implement them in concert you have to radically alter the idea of a land value tax from a 100% (or near 100% tax) to one that is adjustable depending on the land that is being taxed. The reason for this is that the tax relies on the market determining the “highest and best use which can be obtained” for the land itself, which contradicts the need to value land in the rainforest as inherently useful in it’s current “undeveloped” state, to prevent further deforestation. Deforestation which is done to clear land to meet market demand from developed, so called ‘western nations’, for meat, soy and other practices like mining. The system of a land value tax ultimately pushes for the development of open land and has the potential for the premature release of farmland for development.

Secondly, there have only been a few instances of land value taxes being implemented with varying degrees of success and often not in the true (Georgian) sense of the idea. Furthermore, these reforms in ‘developing’ nations have led to an “exacerbation of the concentration of wealth”. In addition to this, the method of using international sanctions to enforce this tax has the potential to harm those very communities who’s land has been taken in the first place.

It’s within these communities that a practical and implementable way in which to improve the situation in the amazon can be found. It revolves around recognising the inherent power held by the many diverse indigenous communities of the amazon rain-forest. These individuals have been resisting colonial and then imperialist forces for many generations. Instead of using a theoretical concept of a global common ownership of land which can then be used to levy taxes, instead the international community should directly demand and support indigenous claims to the right over the land they live on.

By listening to the leaders from the amazon itself, those individuals and communities who are and have always been at the front line of a battle with state-backed corporate land grabs, we can formulate the best way, as an international bloc, to support, bolster, and work with them in saving the rainforest.

Many lands that are mandated by the government for indigenous use are still legally owned by the government itself. This is where many of the illegal activities associated with agribusiness are occurring. Bolsonaro, the Brazilian President, has been targeting these very indigenous groups, freezing the demarcation of new indigenous land and stripping the national indigenous foundation, known as Funai, of its powers. This is exactly what must be stopped and soon. It’s widely held that supporting indigenous land rights is a key process in preventing deforestation and destruction. It has been show that in some cases it can reduce forest fire incidents by 16% compared to areas that are simply ‘protected’ without land rights. This makes sense because these communities have been successfully and actively managing the rain-forest for countless generations. Initial reports from the world bank state that: “it will cost far less to save carbon by recognising forest community rights rather than relying on the future money markets”. Furthermore, one report outlined that it would cost £2 per hectare to recognise indigenous land rights.

Compared to a cut and paste tax requiring hoards of land valuers, this is a method that is both steeped in history and has already been implemented and measured. It’s ethical, anti-imperialist, and efficient. The World Resource Institute showed in their research that: “securing community forest tenure is a low-cost, high-benefit investment that benefits communities, countries, and global society”. However, this will not be the only way we can quickly and decisively stop the destruction of the rain forest. Perhaps an Eco-tax in some form and other international methods of pressure will be key in this collective endeavour, but this should always be fronted and led by those communities who live and resist within the amazon rain-forest itself.

For virtue signalling flag wavers, here are some ways you can help below:

Support the rainforest action network working directly with indigenous communities

Follow and support resistance on the ground and indigenous groups

Choose alternatives and pressure your own government

Investment firm Goldman Sachs reports 51% gender pay gap

US-based investment firm Goldman Sachs has reported a gender pay gap of nearly 51% as part of new legislation that forces all businesses to disclose their gender pay statistics.

The bank paid women 50.8% less than men for each hour they worked at the business in 2018 worldwide, which is around 5% lower than its reported gap in 2017. however, the UK branch of the Investment bank reported a gender pay gap of only 17.9%.

The report also highlighted an average financial bonus pay gap of 66.7% for Goldman Sachs International, with an average financial bonus gap of 40.7% for Goldman Sachs UK branch.

However, it was also found that both Goldman Sachs International and the UK branch of the firm give bonuses to a higher proportion of women at the firm than men, and at the lowest salary groupings, women earned on average more than their male co-worker counterparts.

The report was calculated on statistics based on the average salaries of men and women paid at the firm in the UK, irrespective of role, seniority or performance.

The bank has stated that this doesn’t reflect a lack of commitment to the Equal Pay Act, but is instead indicative of a longstanding issue within Investment banking, that men are more likely than women to gain senior roles and work bonuses.

The highest salary grouping for the firm, which commonly constituted the most senior levels of management, found a pay gap of over 63.8% for the International group, and 55.2% for the UK branch.

Similar reports have been found in other banks, such as the Bank of England, which reported an average pay-gap of 21% and reported that their highest paid employees were 70% male, compared to the lowest paid who were 57% female.

Goldman Sachs have also released an outline for how the investment firm plan to deal with the pay gap and the issue of diversity within the business.

The firm has committed to expanding the diversity in the upper management of the bank, including new policies for childcare and eldercare, as well as new healthcare plans for fertility and gender dysphoria.

The firm also aims to gain a 50% female-male quota when hiring analysts from University and from other companies, along with proportional hiring quotas for ethnicity.

Jobs market indicates that UK economy may be heading for a new recession, warns Research Group

The Enterprise Research Centre has indicated that the recent surge in employment may not only be a fluke, but an early warning sign of an approaching recession.

The Enterprise Research Centre, a research network focusing on research into business and industry, has released a research paper on the proportions of jobs being created and destroyed over the past year in the United Kingdom, using data collected from the Office of National Statistics.

The research paper compared job market data between 1998 and 2018 from the Office of National Statistic’s Business Structure Database.

Overall, last year saw 4.9 million jobs either created or destroyed in the economy, in what was described by the Group as a “jobs churn” in the private sector. This is equivalent to 23% of all private sector employees either being fired or hired in 2018 alone.  

Established companies that had been set up and operating since before 2018 had created 1.65 million jobs in 2018, however this was vastly outweighed by an overall loss in jobs of 2.25 million, which is the highest number of jobs destroyed since 2010, at the height of the last recession. This led to a net loss of around 613,000 jobs from existing businesses in the private sector.

Around 1 million new jobs were created by start-ups, or companies that had just been set up and had began operations in 2018. This led to a net positive figure of employment in the jobs market of around 400,000 in 2018, a figure that was widely endorsed as a large success by the Conservative Government when the data was published earlier this year.

However, the total number of jobs lost last year was 17% higher than previous years.

The rate of births in the country has also slowed, and the number of deaths has steadily risen since 2016. This has led to many English regions, such as Yorkshire and parts of the East of England, to see the number of deaths exceed the number of births in 2018, leading to a decline in the total population. The death rate in the UK has not exceeded birth rates since the recession period between 2008 and 2012, where the number of deaths rose to a height of almost 5% above the birth rate for the United Kingdom.

Following a net high in the private sector job creation over recent years, despite a seemingly positive sign of an increasing number of the population being in employment, 2018 has seen a drastic change in the composition of the jobs market, seemingly indicative of the jobs climate in pre-recession Britain, with a similar pattern seen in 2005, 2006 and 2007 under ONS data. This could possibly indicate that the UK is heading towards a period of unsustainable growth followed by a sharp decline in the economic stability of the country.

UK will lose £800 billion in financial assets because of Brexit, report estimates

A report by the New Financial Group released today has identified 275 banking and finance firms that have moved or are in the process of moving staff or assets away from UK jurisdictions into European Union countries.

It was found that 250 firms have chosen a specific “post-Brexit hub” for business to the European Union, and 210 are setting up new corporate and legal entities in the European Union to manage business into the Nation Block.

Estimates have predicted that investment firms and banks will relocate around £800 billion in assets, and a further £65 billion in direct funds, to financial centres outside the United Kingdom either during or after a Brexit deal has been finalised and enacted.

The New Financial Group has presented a vastly different overview of the financial landscape originally predicted in past reports, with more than 40 firms moving assets to more than one city within the EU.

The report has also highlighted the top 5 EU cities benefiting from the relocation through added business traffic, with Dublin being seeing the largest economic benefits with over 100 firms relocating assets into the city- around 30% of all the asset migration identified by the New Financial Group.

This is followed by several mainland European cities including Luxembourg, Paris, Frankfurt, and Amsterdam, all seeing at least 30 firms relocating assets or staff to each city.

The report has also shown different migratory patterns for different financial sectors, with the majority of hedge funds and private equity firms moving to Dublin, and almost 90% of the assets being moved to Frankfurt are from investment banks.  

The predictions outlined in the report have also been theorised to only increase in the future as the deadline for Brexit draws closer. Local regulators within the European Union may require firms to increase local operations in European financial centres following the United Kingdom’s formal exit from the Union, and as the final Brexit deal changes more businesses may be required to move assets into European Union jurisdiction to keep unrestricted access to the free market.

In the financial banking industry, the majority of the damage incurred from Brexit occurred between the immediate economic fallout from the aftermath of the Brexit Referendum in 2016 and last year, when it was realised that the final Brexit deal would put the United Kingdom at a significant economic disadvantage on the international stage in the field of investment banking security. Many investment firms have already pulled out the majority of their assets where possible into more stable markets as economic uncertainty becomes more prominent in British finance. It would be an accurate prediction to estimate that firms will not relocate back into the United Kingdom until the economic uncertainty and fallout from the formal Brexit process due to begin later this month has settled and British markets have regained a relative state of consistency. Whether this will take a few years, or several decades, is something as of yet to be predicted.

Government withdraws bill that would help clampdown on tax avoidance over fears of backlash

The Government has withdrawn their plans for a new Financial Services Bill on transparency after local council leaders from Jersey, Guernsey, and the Isle of Man warned of backlash should the deal be passed in Parliament.

The Bill was originally designed to protect financial services in the event of a no-deal Brexit, but a new amendment tabled by both members of the Labour Party and Conservative Party included added transparency laws directed towards British Overseas Territories to avoid money laundering and tax avoidance.

The proposed amendment would call for British overseas territories and dependencies to publish all registered company owners by the end of 2020, which the UK itself has already established.

The bill has been aimed at forcing areas under UK jurisdiction to be more open about assets held there out of fears that British Overseas Territories could become tax havens for European businesses after Brexit.

However, local leaders in the Islands surrounding the UK have warned that they will travel to Westminster before the vote to personally warn Parliament on the ramifications should the Bill be passed with its current amendments.

The amendment to the bill was considered to be vital should the UK leave the European Union in late March without a deal, as it was believed that overseas territories would lead to financial deregulation which would be facilitated by more lax financial transparency laws.

The Labour Party has criticised the Government for withdrawing the plans, and the Labour Party’s Junior Finance Spokesman has stated that Labour had planned to support the bill if it reached a vote in Parliament.

The amendment to the Financial Services Bill was tabled by Labour MP Margaret Hodge, and was a cross-party motion. Hodge has called the withdrawal of the Bill as “outrageous” and has mentioned that she will continue to campaign for publicised corporate registers in all UK territories.

Shadow Chancellor John McDonnell has stated that the withdrawal is “evidence” that the May’s government is “incapable of getting its business through parliament” and accused the government of being “a friend to tax avoiders for too long.”

The requirement for British Overseas Territories and Crown Dependencies to produce a register of all company owners operating within their jurisdiction is now due to be published by 2023.

May’s additional funds to entice MPs to support Brexit could breach Bribery Laws

Theresa May has announced plans to use £1.6 billion to boost economic growth in communities and appears to target communities who’s MPs support her new withdrawal deal.

The announcement was part of the ‘Stronger Towns Fund’, which is believed to be directed towards MPs in current Labour strongholds in under-funded Northern cities and urban centres.

The plans will also see the new funding only being allocated to English communities, and there are currently no plans for similar initiatives in other UK regions.

Recently, it was found that new changes to government local council funding will reroute funds from predominantly Labour-supporting metropolitan centres to rural communities after relative poverty was taken out of the equation used to allocate funding to councils.

Secretary of State for Communities, James Brokenshire, however, has stated that the money is not linked to the outcome of the withdrawal agreement vote scheduled for the 12th of March, and that the funding will be allocated to Brexit-backing communities regardless of which deal is passed through parliament in the coming weeks.

The Labour Party Chancellor, John McDonnell, has called the plans “bribery” and Lord Thomas QC, the representative for Gresford in the house of Lords, has mentioned that the Prime Minister’s plans could be in conflict with the law.

Lord Thomas currently serves as a member or the Queen’s Counsel, the highest honour given to a law practitioner in the United Kingdom.

The plans may be in breach of section 1 of the Bribery Act 2010, which posits that any Minister who attempts to use a political or financial advantage to an MP in order to disrupt their ability to give a fair and impartial vote in Parliament.

Any MP who accepts May’s deal may also potentially be committing a crime, as Section 2 of the Bribery Act 2010 states that receiving this advantage, and intending to act on it, breaches the law.

The funding will be scheduled to last until 2026, equating to around £320 million a year, with the money being divided by region.

Government makes £2bn loss on sale of RBS shares

Overnight the government has sold 925m shares in the majority public owned RBS for £2.5bn. The sale represents a £2.1bn loss at the rate of 271p, compared to 500p a decade ago, which has not been traded above since 2010.

The National Audit Office (NAO) states that the true break-even price is 625p. This itself has never hit this since 2008, and could lead to an overall total loss of over £30bn.

The government still owns 7.5 billion shares, and this latest sale covers 7% of the ownership of the bank. The first batch of shares to be sold after Alistair Darling and Gordon Brown had to intervene in 2008 was in 2015 for 330p raising £1.9bn. After this latest round, taxpayers’ stake in the bank has lowered from 70.1% to 62.4%.

Ostensibly, this loss needs to be measured over what the catastrophic scenario would have been without the bailout out in the first place which cannot be denied when the banking world of a decade ago is judged. RBS was arguably the biggest bank in the world at the time and the Labour government originally was forced to step in to save a crisis, not to attempt to make a profit. Over the past decade the bank has been restructured, and now operates more as a domestic bank, for example RBS now operates in nine countries as opposed to thirty-eight. However, such vast scale restructuring has led to the bank shrinking in size by more than half, leading to between 50,000-60,000 job losses.

Despite these damaging figures, both the government and RBS appear satisfied with the mornings conclusions. Jon Glen, Treasury Economic Secretary argued that it is “unrealistic” to think Britain should hold on to RBS shares until taxpayers can recoup their investment, and Chancellor Phillip Hammond sees the sale as helping to put the “financial crisis behind us”. Hammond also argued that the government should not be in the business of owning banks, and that the proceeds of this sale will go towards reducing the national debt and help to “build an economy that is fit for the future.”

But this it is virtually impossible for the public to feel self-assured in these comments. Especially after the worries amongst financiers earlier in the year that there was potentially another crash on the way, looking at America particularly, which do not seem to let up following President Trump’s latest protectionist trade policies.

Amongst the Chief Executive of RBS Ross McEwan’s pleasure at the largest stakeholder selling more of its share, he is under the impression that RBS is now a simpler, safer bank that is focussed on delivering for its customers and its shareholders. Indeed so, in February the bank reported an annual profit of £752m, this was its first for a decade and a sharp turnaround from the £6.95bn loss the previous year.

Yet on the Today programme this morning, Ian Gordon, a Banking Analyst at Investec, not only reiterated the gloomy news for the public that there is no chance of ever breaking even on its investment, but RBS have further plans to downsize to hit a cost-income ratio target of 50%. This will add to the £40bn already spent by RBS on conduct and restructuring cost, which has not only consumed the £45 billion bailout fee, but together with bad debts has destroyed the value of the business, and could lead to more job losses. Gordon concluded that because of this, RBS is still an inefficient bank and the most optimistic and aggressive target, should all the markets act favourably, would be 2023 for selling off all remaining shares.

Frustratingly, Jane Sydenham, an Investment Director at Rathbone, sees the present as a good time for the government to sell these shares because the economy is “reasonably strong” due to low interest rates which are slowly rising. This may be good for the banks, but similarly was thought over ten years ago, and, looking at the uncertainty in America and the rise of populism across Europe, it remains difficult for faith to be placed in the current economic system going forward.

Despite positive sounds coming from the world of finance, not only is it clear that the public will not be refunded directly, judging from the mixed reception it is still clear that everything is very unclear. At the turn of the year there was talk of another crash. And comments from Sydenham about the economy growing and interest rates being low mean nothing to people whose wages cannot compete with inflation.

Analysis from Iwan Doherty- Editor in Chief

Privatised profits and nationalised losses. When the Labour Party rail against policies for ‘the few’ this is what they mean. RBS has been making losses at the expense of the taxpayer for the last decade, but as soon as it posts a profit it is boxed up to be sold. The policy is corrupt and will only enrich a few people and will hit our pockets.

The chancellor says we cannot hold onto our shares. Nonsense. George Osbourne promised that the Treasury would make a profit on bailing out the banks. We are set to make a £25bn loss. This from the party of fiscal responsibility.

The loss is a spectacular failure by the Tories and another reminder of how the rich and powerful use their influence to tip the tables in society. It is another reminder of the Global Financial Crisis when the economic establishment made us pay up for their mistakes.