On Sat Oct 20, thousands of workers, pensioners, unemployed and youth
will march in London, Glasgow and Belfast against the attacks of this
Tory-led government. Matt Wrack, general secretary of the Fire Brigades
Union, sends a special message through the pages of Socialist Appeal to
all those marching for a better future.
On Sat Oct 20, thousands of workers, pensioners, unemployed and youth
will march in London, Glasgow and Belfast against the attacks of this
Tory-led government. Matt Wrack, general secretary of the Fire Brigades
Union, sends a special message through the pages of Socialist Appeal to
all those marching for a better future:
The economy staggers from crisis to crisis. Overly optimistic government
predictions are refuted by the harsh reality of a double-dip recession. The crisis has devastated the lives of workers in Britain and across the
world. Austerity measures mean real wages cut, unemployment, pensions
destroyed and public services slashed. They are on a scale not seen
before.
The aim is to make working people pay for a crisis we did not cause. We need to set out clearly what lies behind the crisis.
The Con-Dem coalition argues that further privatisation and deregulation
is the route out of recession but it was the deregulated private
finance sector that sparked the crisis. The government’s arguments need
to be challenged. The banks cannot be allowed to carry on the way they’ve done before. We need a sharp break with the practices of the past.
Service
The Labour movement should place on the agenda the call for a publicly
owned finance industry which would provide a public service to industry
and working people.
Taking over the banks will enable the state to plan investment. Instead
of investment bankers gambling with money in financial markets, funds
could be switched to creating millions of sustainable jobs and investing
in the housing, public services and infrastructure we need. The privately owned banking system created a huge credit bubble that
burst and triggered the biggest economic slump in Britain for
generations.
When the crisis broke, the government took shares in RBS and Lloyds and
took over mortgage lenders Northern Rock and Bradford & Bingley. The taxpayer advanced £133 billion to restore the capital of these banks.
So far, only £14bn of the original cash outlay has been recovered. The
banks are still rigging interest rates, laundering illegal cash,
gambling in exotic financial assets and paying their top executives
grotesque salaries and bonuses.
Deceit
Three-quarters of the assets of Barclays bank are invested in trading on
the stocks, bonds and currency markets. Barclays’s elite traders and
top executives took £1bn home between them this year to "reward" this
gambling.
Banks still engage in outright deceit and law-breaking. Barclays was caught out over the Libor scandal, HSBC in laundering Mexican drug money and Standard Chartered with Iranian banks. The banking system is not doing its job in providing loans on reasonable terms to help the economy recover.
Banks are needed to provide financial services to firms and households. Most workers have wages paid directly into a bank. We need to be able to access our money. Sometimes we need to be able to borrow money. At other times, we need to save.
In addition, we need banks to raise funds and provide credit to finance
investment and growth across an economy. This is what banking as a
public service should be about. Britain’s big banks dispose of £6 trillion in funds. Yet they earmark
just £200bn of this to investment in industry, a measly 3 per cent of
the total.
Four years after the crisis began, bank lending is falling, not rising.
The banking sector stands indicted by these figures. Having been bailed
out by the taxpayer the banks continue to fail to assist in any sort of
recovery.
Regulation failed to stop banks collapsing and bringing down the
economy. More regulation won’t work now. It’s expensive, bureaucratic
and ineffective. Despite the mess the banks have caused, we are still
told we should leave them as they are because they make money. But a
survey of the period from 2002-2008 shows that the finance sector paid
£203bn in tax, while manufacturing paid nearly twice as much. Tax
revenue from the finance sector during that period was less than the
estimated up-front costs of the bank bailout of £289bn.
Competition
Some argue that the banks should be broken into smaller units so that
competition can flourish and the monopoly of the big five can be broken.
But the banks are too interconnected – if one goes down, they can all
go down like a row of dominos.
In any case, the crisis did not start with the big banks. In Britain, it
started with the smaller lenders like Northern Rock. More regulation or
a break-up of the banks will not make them operate in the interests of
the wider economy. Their main objective will still be to maximise profits for their
shareholders and bonuses for their top executives. Private ownership
means profit comes before everything else. New regulations can be
bypassed. That will continue as long as banks are under private
ownership.
The public has no control over the banks’ decision-making, even in banks
that are majority state-owned. Only public ownership of the major banks
with a new democratic structure of control can turn banking into a
public service. A publicly owned banking system could finance a mass
programme of useful public works, to create jobs and modernise
infrastructure.
Public ownership
We therefore welcome that for the first time in history, the TUC has adopted the policy of the public ownership of the banks.
In the past, Margaret Thatcher attacked us not because she was mad, but
because she was acting in the interests of the ruling class . Today, in
the face of economic crisis, this same class wants to restructure the
economy in the interests of capitalism and make the working class pay. But local communities will not sit back and see their services
destroyed. In this fight, we must take direct action such as occupying
hospitals or schools.
We must see the end of this government at the earliest opportunity. But
what happens next? Under New Labour we had attacks on jobs, wages and
conditions. No one wants to see the Coalition government that attacks us
replaced by another Labour government that attacks us. We need a change
in policy.
The resources are there. But they are in the hands of the Billionaires,
not in our hands.We need to ask ourselves what sort of society we want –
one where spivs and gamblers decide what happens or where the majority
decides?
We face a huge challenge. We must rise to the occasion and act decisively in the interests of our class.
