Tag Archives: Banks

The Labour Party needs to shout much louder about inequality

Why is Labour so quiet and timid about the super-rich, those on more than £3,000 a week, and the ultra-rich, the FTSE-100 bosses who now average $.4 million a year remuneration, or to put in more readily used terms, £86,000 a week?   There are 3 good reasons why Labour should open up a major broadside against the very rich and the stratospheric rich.   One is that it would be very popular.   The public hostility towards the bankers and their multi-million bonuses (NB the outrage of some bankers reported a few weeks ago that they were only being given bonuses of £4 million compared with the £6 million given to some others) and the visceral hatred felt towards the greedy profiteering of the Big Six energy companies are an open invitation to Labour to go over on to the attack relentlessly and persistently, and not just because it would be popular, but because it’s right.    There is no justification for these obscene levels of pay and remuneration appropriated by the wealth elite, it has nothing to do with the national interest, it is no reflection of merit – it is simply a reflection of their power in the market-place and their insatiable self-interest.   That’s why the public hates them so much  and why they offer such a tempting target to Labour on moral and ethical grounds and not just for funding reasons.
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Battle-lines drawn for 2015: Tory permanent austerity v. Labour decent affordable society

Cameron, surprisingly, has really let the cat out of the bag.   In a speech yesterday to the Lord Mayor’s banquet (complete with champagne, roast duck and assorted fruit meringues) he let slip to his audience that the Tories would not restore public expenditure after the structural deficit had been eliminated, but would maintain austerity indefinitely (though not of course for the worshipful dignitaries enrobed before him who have had what might be termed a good austerity for the serious money).   In 2010 he said “I didn’t come into politics to make cuts”; now he is addicted to them.   Just as the Tories aim for a permanent low-wage economy, they now strive for a permanent low-cost State so that only will the cuts not be restored, but they will be taken further even when the budget is in surplus.   That creates a huge contrast with declared Labour aspirations – a Living Wage for all, constraints on soaring prices to make real wages go further, taxing the rich to provide jobs for the young unemployed, ending savage reprisals on the victims of the bedroom tax and the Atos disabled, and a big increase in social housing to deal with a drastic housing shortage.
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This is how an Act to enforce tax transparency & prevent tax avoidance should work

After 4 hours of massive Tory filibustering to prevent my bill being reached, I finally got a brief chance to make the case for ending tax avoidance and enforcing tax transparency on the richest individuals and the biggest companies: 

Michael Meacher (Oldham West and Royton, Labour)

Tax avoidance and financial transparency, or perhaps I should say the lack of financial transparency, have of course been high on the Government agenda for the past two years. They even led Prime Minister to make tax transparency and trade his central international focus at the G8 at Lough Erne in June. However, having marched his troops up the hill, rather like the Grand Old Duke of York, the Prime Minister has since proceeded to march them down again. Rather little of significance—that is being generous—has happened on the tax and transparency front since then.

At the G8, the UK published an action plan on tackling some of the issues involved, but it is not unfair to say that it was decidedly modest in its ambition. The same can certainly be said of the scope of the subsequently announced consultation on disclosing the beneficial ownership of companies. The Government have, of course, published the general anti-abuse rule, but as has often been said, it will cover only the most egregious forms of tax abuse and is consequently in danger of appearing to legitimise lesser forms. The GAAR is

rather like the lobbying Bill that is currently before the House—the Government are extremely keen to be seen to be doing something, but they have no intention whatever of actually doing much. If we are really serious about tackling tax avoidance and the financial opacity of our tax system, a more robust approach is needed. That is what my Bill is intended to offer.

The Bill was drafted by Richard Murphy, who is the founder and director of Tax Research UK and, I think everyone will agree, one of this country’s foremost tax accountants. I am extremely grateful to him, as I believe the whole House should be.

There are two drivers behind the Bill. One is the demand for fairness and social justice. The country is in the middle of a deep economic recession caused by the bankers, yet the Government have imposed on the victims the liability for meeting the ensuing very high national debt and budget deficit.   By and large, those victims are the poorer and poorest households, who bear no responsibility whatever for the crash five years ago.   According to the Sunday Times rich list, the wealthiest 1,000 persons in the UK—just 0.003% of the adult population—have increased their gains by a staggering £190 billion since the crash. Most of that has now been squirreled away in tax havens, hidden behind nominee shareholdings or secreted in opaque trusts. Frankly, that is utterly intolerable. It is high time that the very richest people in this country made a fair contribution to resolving the financial crisis. The Bill would help them to do so.

The second driver behind the Bill is sheer, plain, down-to-earth, honest-to-God common sense, if I can put it like that. My right hon. Friend Mr Darling, the last Labour Chancellor, reduced the budget deficit by about a third by the end of 2010 through his stimulatory measures, but it has now been stuck at about £120 billion after flatlining for most of the past three years.
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Labour attack on Tory pay cuts would resonate even more if MPs took same pay cuts until national income rises

Labour’s at least half right to explode the Tory economy bubble by exclaiming: Recovery?   What recovery?   OK for bankers’ bonuses, OK for City private equity, OK for investors’ share indices, OK for Treasury austerity enthusiasts.   Yes, fine for the top 1% – that’s 300,000 individuals out of the UK’s 40 million adults.   But what about the other 99% whose average income in real terms has fallen 5.5% since the 2008-9 crash?   That’s a reduction of £1,250 a year for the average family.   Worse, it’s not all over.   Some of the most draconian measures in Osborne’s entire package are back-end-loaded, i.e. they will hit families hardest in 2014-18.   Unemployment is still stuck around 2.5 million, and youth unemployment among 18-24 year olds is still rising at over 19%.   Even of those in work, a significant number are now part-time workers so that the number of whole-time-equivalent employed persons is actually steadily falling.   There are now over 900,000 persons who have been out of work for more than a year.  And while inflation has marginally crept down to 2.7% on the latest figures, that is still more than twice the rise in pay which is still pegged back at 1.1% a year.   Some recovery.
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When is the Labour Party going to stand up & oppose zero hours contracts, blacklisting, pay cuts, Beecroft hire & fire?

The finding that more than a million British workers (not 200,000 as earlier claimed) are employed on zero hours contracts tells you half of what you need to know about market fundamentalism in Britain today.   The other half is that there are now 2,436 bankers in the City of London taking home more than €1 million a year, that is £15,723 a week, and their bonuses are now rising again.   The first group have no guarantee of work or pay, often get no holiday or sick pay, and to cap it all have to ask permission before trying to get additional work elsewhere (even though if they don’t get additional pay they could be sanctioned by DWP).   The second group nearly crashed the world economy, have not been held to account, and now think they have a right to return to business-as- usual as though nothing’s happened.   Welcome to Osborne’s equal opportunities Britain.
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What should bankers be paid?

As bankers’ pay+bonuses+long-term incentive schemes+share options+pension largesse begins to head north again as though the biggest financial/economic crash caused by them hadn’t happened and as City bonuses rise above £4bn this year, what does the public believe that bankers should be paid?   Remarkably, nobody seems to have asked them.   Certainly not the government which is far more concerned whether unemployed persons on JSA deserve their £71 a week ‘handout’.   It might come as some surprise to members of the public – and perhaps even to ministers – that there were 2,436 bankers in the City in 2011 paid a minimum of €1 million a year, that is a minimum of £16,025 a week, or to put it another way at least 271 times what someone on JSA gets.   Of course a banker should be paid more than someone who is jobless, but 225 times?   Or in the case of the top banking elite 1,000 times more?
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Miliband’s Falkirk response is strong & fair, Cameron’s to the Tory Right & the banks is constantly weak & craven

Ed Miliband’s article in the Observer today is a model of how a Leader should handle the kind of row that breaks out from time to time in all parties and in most organisations.   He has called in the police to investigate the facts, demands that the truth should be openly and transparently made known, and if there has been any breach of the party rules or if those rules need to be extended or modified, then that will be dealt with.   He has not however succumbed to the siren voices on the Blairite Right demanding that Falkirk be used to break Labour’s umbilical link with the unions.   He is going to mend the link, not end the link.   That is a thoroughly sensible and balanced way to resolve this matter which should certainly not be brushed under the carpet, but has been blown up out of all proportion against the background of the constant shenanigans fixing selections practised under the previous Blair-Brown regimes and sanctioned from the top.
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The Tyrie Commission report on banking is too narrow and misses the real point

The Tyrie Commission, after 9 months of deliberation and 571 poages of reporting, has disappointingly limited its purview to governance, standards and culture – issues which certainly cry out for reform, but which are not at the heart of what is really wrong with the banks.   But on those issues it has been promisingly radical.   It would be difficult not to be when the bankers have nearly blown up the global economy and have so far received nothing more painful than social opprobrium and a reduction in pay and bonuses from the outlandish to the merely excessive.   Nevertheless it is good that there is now real pressure on the Treasury behind the idea that key responsibilities within banks should be assigned to specific individuals (‘the senior persons regime’), together with a licensing regime for any bank staff who could “seriously harm the bank, its reputation or its customers”.   It is better still that the report proposes a new crime of ‘reckless misconduct’ for bankers as well as reversing the burden of proof against bankers in civil cases.
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FSA takes on City chancers – oh yeah! and only 6 years too late

Wow!   “We need to have a low tolerance for firms that consistently bump along the bottom”.   With a warning like that from the new head of enforcement and financial crime at the FSA, Tracey McDermott, the Big Five banks must be……………….laughing all the way to the bank.   We’ve heard all this sort of thing before: mistakes were made, we express our regrets, but we’ve learnt our lesson, and these things will never happen again………..until the next time.   So what’s really changed?   Why, 5 years after the crash began in 2007, have no top bankers been sent to jail?   Why did the authorities get not an inkling that the explosion of toxic derivatives (probably some £2-3 trillions worth) might bring down the whole system?   Why did they take no action for 7 years when LIBOR was being regularly manipulated by 14 major banks under their very noses in London?   Why is it that, when there is another colossal scandal, it is nearly always triggered by the US courts, not by the British regulators?
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