banking reform « Labour Uncut

Posts Tagged ‘banking reform’

Ed Miliband is the only politician talking about what really matters: inequality

24/01/2014, 12:22:34 PM

by Robin Thorpe

With Ed Miliband’s recent talk of rebuilding the middle class and his previous rhetoric of the squeezed middle are we now seeing a resurgence of class consciousness? Or is Ed just focusing on familiar words to cloak his lack of credible policies? I sincerely hope it is the former. The problem with the concept of class is that because the labour market is now so diverse it can be difficult for people to identify what class they are. Perhaps, therefore, we should just recognise that there are broadly only two classes of people; the ‘power elite’ and the rest of us.

I can understand why people may want to cling to the notion that there is a hierarchy of socio-economic divisions that we can climb up if we only work hard enough. People have evolved to compete for resources and societies have long been predicated on prestige and social position. But surely we must now recognise that the division between the elite and the rest is so entrenched that it will take more than a bit of pluck and a protestant work ethic to break the stranglehold of inequality. Will Hutton has written that he thinks that Ed Miliband’s “cost of living” crisis is a sideways route into opening up an argument over inequality and I hope that he is right.

Enabling effective change will not be easy; there are many vested interested who will oppose a recalibration of the way that our economy works. The obvious attack on Miliband’s ambition is to decry it as statist and anti-business. Fraser Nelson writes in the Telegraph that a Labour government implementing this agenda would result in “companies refusing to invest, and wealth-creators leaving”. This argument ignores the fact that the notion of state vs. business is a false choice; neither can this choice be defined as socialism vs. capitalism. Instead it should be defined as shallow versus deep freedom.

Steve Davies from the Institute for Economic Affairs (on Radio 4’s The Longview) agrees that the cost of living is a real problem for those on low wages; in particular the cost of housing. But he also states that workers must increase their productivity to improve their wage-earning capacity, as if low wages are their fault for not working hard enough. Solving the problem of the cost of living will still leave people dependant on increasingly precarious employment.

(more…)

Posted in Grassroots | 5 Comments »

If Ed is serious about banking reform, its a British investment bank that is needed

22/01/2014, 02:18:11 PM

by David Butler

The case for banking reform is one that, on the centre-left, does not require extensive repeating. The banks were central to the crash and have not been seen to have redeemed themselves. In particular, lending to small and medium enterprises has fallen substantially in the post-crash environment and was not particularly healthy pre-crash. It is into this sea which the good ship One Nation Labour (formerly known as Responsible Capitalism), under her captain Ed Miliband, sailed.

Small and medium-sized enterprises suffer from an inadequate supply of finance. The impact of this was captured in IPPR’s Investing for the Future report. SMEs are usually reliant on loan-funding and are unable to sell bonds or access other sources of capital available to bigger businesses. The report contends that banks have gradually been switching their activities towards loans and investment that offer bigger yields and more immediate profits, which has squeezed loan-funding to SMEs. Due to information asymmetry, banks have used a ‘tick box’ approach for making decisions on loan funding, which has result in a further structural shortage as many potentially good SMEs are shut up of the one-size-fits-all criteria.

Current government schemes to encourage SME lending do not appear to be successful. In the footnotes of the IPPR report, the authors quote an article in the Financial Times which claims that of the £100 billion in low-cost capital created by the government, banks plan to use up to £80 billion to replace existing loans backed by market-price capital. It is clear that simply giving cheap capital to private sector banks will not help. This has been matched by the continue fall in lending to SMEs captured by recent Bank of England figures. This lending problem is a constraint on future prosperity and do nothing to relieve the cost of living crisis. A new approach is needed. Ed Miliband believes that more competition will provide the answer.

(more…)

Posted in Grassroots | 2 Comments »

Wednesday News Review

31/08/2011, 06:59:01 AM

Ed to force a vote

Police cuts could lead to weaker law and order on the streets, Ed Miliband has warned as he called on the Government to “learn from the riots”. Mr Miliband has linked the riots to the need to have more officers on the streets. He wants to put pressure on the Government to reverse cuts to the amount of money given to police forces. He also opposes plans for directly elected commissioners which could cost £100m to implement. Mr Miliband hopes to be able to force a vote in Parliament on the issue – either through Labour’s opposition day debates or if enough members of the public sign a petition. But in the weeks since the riots, the Home Secretary defended the budget cuts and said they were not going to be as dramatic as some feared. While Labour have cited the figure showing the cuts amount to 20% in real terms, Theresa May argues they are smaller in cash terms. – Sky News

Labour leader Ed Miliband plans to force a Commons vote on police cuts to flush out Tory rebels and reveal Government splits. The move comes after Mr Miliband, 41, launched a new attack on Chancellor George Osborne’s decision to slash 20% from forces’ budgets. The Labour chief said it was “reckless” not to rethink the cuts in the wake of the riots that swept England earlier this month. The cost reductions will mean a 16,000 drop in officer numbers and a drastic fall in civilian police staffing. Labour may use an e-petition to trigger a Commons debate on cuts. Strategists believe many Tory MPs will not vote for the cuts, causing embarrassment for PM David Cameron. Those who do are likely to face a backlash from angry voters. – Daily Mirror

Mitchell is caught with his papers down

International Development Secretary Andrew Mitchell was pictured holding the document as he left Downing Street. He had been at a meeting of the National Security Council, chaired by PM David Cameron. The papers welcomed Afghan president Hamid Karzai’s announcement that he will stand down in 2014, stating: “This is very important. It improves Afghanistan’s political prospects very significantly. We should welcome Karzai’s announcement in private and in public.” Mr Mitchell is not the first prominent figure to accidentally show secret information. In 2009, Bob Quick was forced to stand down as Britain’s most senior counter-terrorism officer after he revealed details of an operation to foil an al-Qaeda plot. The year before, then housing minister Caroline Flint was pictured entering Number 10 with a briefing paper predicting property prices were set to plunge. – the Sun

The warning from the World Bank was disclosed in a private Cabinet briefing paper which also showed the British Government welcoming the decision of Hamid Karzai to step down as Afghan president. The paper was prepared for yesterday’s meeting of the National Security Council by officials working for Andrew Mitchell, the International Development Secretary. The document was photographed as Mr Mitchell carried them out of the meeting uncovered. Much of the document refers to an ongoing dispute between the Afghan government and the International Monetary Fund. The IMF is reviewing its support for the Kabul government over allegations of widespread corruption. In April, Britain stopped its payments to the main Afghan reconstruction fund. Mr Mitchell’s note showed that the World Bank has said that unless the dispute is resolved soon, the “transition” process, where the Afghan government takes responsibility for security and Western troops gradually withdraw, will be jeopardised. “The World Bank have told us that the suspension of UK and other [donor] funds to the Afghan government will soon begin to destabilise [activities] essential for successful transition,” the note said. – the Telegraph

The Coalition is split over banking reform

Conservative and Liberal Democrat ministers are at loggerheads over plans for sweeping reforms to Britain’s banks aimed at avoiding another taxpayers’ bailout in a future financial crisis. The Business Secretary Vince Cable is demanding the immediate introduction of proposals to force the banks to ring-fence their high street and riskier investment arms that are due to be published by the Independent Commission on Banking on 12 September. But David Cameron and George Osborne, the Chancellor, are sympathetic to the banks’ demand for them to be given several years to build the “Chinese walls” to be proposed by the commission chaired by Sir John Vickers – which could see the reforms delayed until after the next general election. Nick Clegg is backing Mr Cable and the timing of the reforms threatens to provoke a power struggle at the top of the Government. – the Independent

Tories and Coulson avoid an inquiry

The Conservative party will not face an official inquiry into allegations that it broke electoral law by failing to declare News International‘s payments to its former head of communications, Andy Coulson, after the elections watchdog concluded that there was insufficient evidence of a breach. The Electoral Commission had been asked to investigate a series of payments amounting to a six-figure sum made to Coulson by News International in the months after he arrived at Conservative campaign headquarters in 2007, as well as a company car and health insurance he received for three years. Tom Watson, the Labour MP and member of the Commons culture select committee, had raised concerns that the money could have amounted to an undeclared donation to the party. The revelation that Coulson received the severance payments from News International while working for the Conservatives put renewed pressure on the party, which had previously denied that he was paid by anyone else while employed by them. – the Guardian

Posted in Unbound | No Comments »

McFall leads charge to provide trusted bank

12/07/2010, 04:11:51 PM

The Labour peer, John McFall, prior to the election a redoubtable chair of the treasury select committee, is to be a director in a new banking venture that will compete to buy government-backed assets such as Northern Rock and a portfolio of branches of Lloyds Banking Group.

Sir David Walker, who last year published a report on corporate governance, and Charlie McCreevy, the former European Union internal markets commissioner, will join McFall as directors. Lord Levene, a crossbencher and outgoing chairman of the Lloyd’s of London insurance market, will serve as chairman to the new venture.

(more…)

Posted in Inside | 1 Comment »