The thinktank New Economics Foundation (NEF) have just published their finding that last year the Big 4 banks – HSBC, Barclays, RBS and Lloyds – enjoyed a ‘too big to fail’ taxpayer subsidy of no less than £38bn. This is in an economy where the budget deficit is still £111bn and where money is so tight that Osborne has already announced he is intending to cut benefits for those in need by another £12bn in the next Parliament having already cut back these benefits by over £20bn in this Parliament. At the same time the City of London Corporation, the traditional redoubt of financial capitalism, has also just announced that corporation tax paid by the financial sector has halved since 2007 to just £6.5bn. Furthermore an LSE study recently estimated that the 10 top banks, so far from supporting the interests of the real economy (even government bribes to get them to lend to industry having had little effect), engaged in an orgy of scandals that cost a staggering £100bn over the 5 years to 2012.
The banks are not the only corporate interests that in a climate of alleged austerity have had staggering levels of largesse showered upon them. Since privatisation in 1996 the railway industry has received more than £10bn cash in subsidies, with profits guaranteed by the State. Last year Serco received about £2bn in taxpayer-funded contracts which accounted for some 45% of its revenues, despite having been found making false claims for public monies from the phantom tagging of criminals. Despite pretences about risk-taking, gas and electricity companies as well as nuclear and water won’t look for alternative sources or safer practices without public subsidies. Telephone companies refuse to expand internet or signal coverage to include rural areas without public subsidies. The Big 5 oil companies – BP, Shell, ExxonMobil, ConocoPhillips, and Chevron – have made more than $1 trillion in profits in the decade to 2011, but still demand and get subsidies and tax breaks for drilling for oil and gas.
Why does Labour follow the Tory narrative so timidly and cravenly – indeed even striving to outTory it on some occasions – rather than telling the alternative narrative about the options for dealing with the deficit which would give the electorate a wholly different perspective from the establishment line? Why allow the Tories to get away with concentrating on the public deficit which is £111bn whilst disregarding the mountain of household debt which is £1.35bn and the even bigger mountain of bank liabilities of some £5 trillions? Why allow the Tories to get away with the canard of inevitable austerity without spelling out that growth, expansion and jobs are a far, far better and quicker way to cut the deficit? Why allow the Tories to insist that further drastic cuts in the incomes of the poorest and most needy are unavoidable when largesse continues to be piled on the biggest corporates which demand profits at taxpayers’ expense, but accept none of the responsibility when things go wrong? We would all like to know the answer.