As the Guardian and others have reported:
Labour has pledged to “unashamedly champion” the UK's financial services sector, as it promised to cut down 10,000 pages of regulations and ruled out a windfall tax on bank profits.
The detail of this story does not matter, largely because there is little of it. This is a story about Labour policy after all: beyond a headline, there is never anything very much to one of those.
But what we do know is that:
- Labour intends to slash City regulation.
- It will not tax banks more.
- Bankers' bonus caps would not be reinstated.
- It will be demanding 350 free banking hubs in the UK - so one for roughly every 120,000 adult people, which is obviously (not) going to solve the problem of access to free banking services.
- It wants UK resident people to invest a lot more in shares, even though we know this almost never delivers new funding for investment.
Politely, this is gross irresponsibility.
It not only makes Labour a cheerleader for the sector that has done more than any other to bring the country to its current dire state but also closes another route to tax and simultaneously abandons the duty the government has to provide people with the banking and savings services that they need so that their money is safe.
What does this feel like? Gordon Brown in about 2005 is what this feels like, and he, of course, helped create the crash of 2008 and all that followed by his own responsibility in this area.
I can't quite believe that Labour is stupid enough not to learn even the most basic lesson from its own history, but apparently, it has not. In my opinion, the deep-seated lure of securing a well-paid job in the City after being in office does, even now and before Labour has got into office, lead them to appease the sector that needs most of all to be reformed if the economy of this country is going to serve the needs of the people who live within it.
I really do despair of them. Stupidity of this sort is off the scale that I thought it possible to measure.
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I do like to dip into this blog once or twice a week generally reading the most recent posts and those with the most comments. I like the way you try to fly above above party politics and look down on the political scene and thank you for that. With your love for birds perhaps you could rename your home office the Eagle’s Nest.
I can’t believe people clicked the “like” button on this.
Somebody claiming to be called “Kell Steinhouse” (a not-very-thinly-veiled reference to Kehlsteinhaus) suggesting that Richard lives in The Eagle’s Nest… which was Hitler’s mountain stronghold…
Troll, troll, troll, troll, troll. And then Troll some more.
Don’t you morons ever get bored?
I missed that
I thought it was all very weird, but am clearly not well enough versed in the Nazi fantasies of the author of that comment
Your point (and anger) are completely justified. It really is time to move on from WW2. Kellsteinhaus offers a breath-taking, even commanding, view, not unlike Richard’s perspective on this government’s economic and financial shenanigans. Just as Eagle’s Nest has been repurposed (as a restaurant) in real life, let’s reclaim and repurpose that old, stale rhetoric to meet today’s circumstances.
But let’s not forget the history. Just as Hitler stripped the German economy to create its war machine (as Putin is doing to Russia over Ukraine), so too the City is stripping the country to fund its colonisation of the British Isles. As WW2 showed, this doesn’t end well for the leaders and the people, but the managerial class did and continued to do well.
Labour…. laughable, pathetic, useless. And this is the next government!?
Christ alive, chained to a rock, and weeping, in hell.
Just on bankers bonuses, the cap on bonuses was 200% times the base annual salary, with the intention to prevent excessive risk taking. (As I understand it, one side effect was a significant increase in base pay.)
Reeves has said introducing the cap was right, but now she says it is right not to cap.
Has excessive risk taking become acceptable now? Who needs a bonus of more than twice the (already generous) base pay and why?
Who knows?
There is no logic to anything she says, except her desire to build Singapore-on-Thames
The flip-flop on bankers’ bonuses is the worst of all worlds. Its introduction led to a ratchet up of base salaries (to ensure that overall compensation did not fall). Now that bonuses are uncapped do you think that base salaries will return to lower levels? No way…. but bonuses WILL go up.
Precisely
Wasn’t the ‘public buying shares’ thing also pushed by Osborne?
It’s pretty clear that the Labour leadership is now in favour of an unfettered capitalism and any thought of social justice and economic equality for the majority of the population (which is what Labour was originally founded upon) has been completely thrown out of the window. I pity those rank-and-file Labour members who still think they can resurrect the policies of Keir Hardiw, Atlee, Bevan et al who founded the Labour Party and introduced the welfare state in 1945 – 51.
I suspected such when Starmer did not release the names of his donors until the leadership contest votes were in. The delight of the Blairites in our constituency was indicative, as was the sea change in attitude to lefties and LBQT. Once Evans started to dictate what could be discussed at meetings, and said Conference was sovereign only in session (i.e. we can make up our policies regardless of the membership), I left.
This will be written about by political historians as a successful right wing coup.
Looking at the two main parties in Westminster, am I the only one here who’s reminded of the end of Animal Farm?
Reeves’s comment about the cap on the bankers bonuses is exactly the same as Hunt’s when he got rid of it last year.
This is groundhog day economics, setting the scene for another catastrophe.
It seems that Labour have lost all social cause or reason to govern.
Even though your magnificent post the other day set out what I understand to be the true nature of government debt is, this is being ignored and Labour chooses to believe that it has run out of financial road to do anything and must rely on unfettered greed to generate hotly disputed taxes.
They’ll be stabbed in the back again, just like Blair and Brown and the rest of the world were – derivatives are still too under-regulated.
The other day, after telling my 18 year old son that I would not be voting, he told me that I’d given up on politics.
I mentioned MMT, Richard’s blog on the nature of debt. And do you know what he said? People would never believe it.
‘And I’ve given up’ I said to that.
But if politics can’t breakthrough, what can? It begs the question.
Believe
That’s all we can do
So……….
The real economy – manufacturing and services exists to serve human needs/wants
Clearly part of the ‘Financial Services’ industry exists to provide services to the real economy – insurance, finance, foreign exchange etc. But like a cuckoo – or a cancer it has been allowed to grow far beyond any rational size.
I suggest that rather than growing ‘The City’ needs to be surgically removed
Bigger bonuses means more tax to spend on the NHS. Embrace it. Don’t let envy and bitterness get in the way!
If you really understood the way that the economy works (and you clearly do not) you would know that tax does not fund government spending.
Before thinking you are making clever comments here, which aftually show your ignorance, you might want to think a little harder and learn a great deal more, inclduing about the fact that almost all those who refer to bitterness and envy are those suffering it.
Two things are infinite: the universe and human stupidity; and I’m not sure about the universe. – Albert Einstein
I’ve tended to give Starmer’s Labour the benefit of the doubt but they have totally lost me with this. One look at the list of people they got to advise them tells you why – all City big wigs intent on serving their own interests and disinterested in the wider economy and society. Nobody there from the real world who needs the kinds of services the City fails to deliver. And Reeves and Labour lapped it all up with barely a squeak of dissent.
We have a City that is focused on wealth extraction. At the expense of everyone else. No surprise that they are the major supporters of the Tories and were big financial backers of Brexit. If they have a lot of regulation it’s because they have repeatedly shown themselves incapable of behaving ethically and legally, shown by a level of fines an order of magnitude greater than any other sector. Even that leaves them unpunished for the financial crash. Encouraging them to pay themselves ever more obscene amounts … words fail me.
And me too……
Those who talk about Singapore on Thames clearly know next to nothing about Singapore in practice. Truss would throw any number of tantrums if she knew all the things that are banned there. Others have pointed out social housing. Nick Leeson could tell you about how ruthless their banking regulations are. And I did a lot of work with an international bank out there – you did not mess with the regulators. Unlike the poodles we have here. Which is why serious businesses like doing business there. Add in very long term investment in infrastructure and support for industries. Its actually quite like current China which is why previous Chinese premieres went to talk to them when they were introducing more private enterprise.
New Labour did a lot of good things, notably with the NHS, but they made three massive mistakes. Iraq is the one everyone talks about but I’d cite all those PFI deals and the utter failure to regulate the City which led to the financial crisis. PFI deals (and privatisation) and failure to regulate did far more damage to the UK economy and society than Iraq (and yes I was on that march).