Ed Miliband’s half-baked proposals to increase competition
between high street banks – not exactly a burning issue for most working people
– just about sums up the Labour leader’s vision of the “responsible capitalism”
he champions.
In this Miliband dream world, the top five avaricious banks
that regularly fleece their customers with all sorts of charges – when they are
not busy precipitating a financial collapse that is – will be made to sell some
of their branches.
Somehow these will be bought by a new entrant into the
banking sector and, lo and behold, competition will increase and bring a better
deal for customers. And this is One Nation Labour’s outlook: better markets,
more competition, new and improved capitalism.
Who can fail to be swept off their feet with the excitement
of it all! The intellectual power of this argument is too stunning for words.
So don’t think about it – get out there and vote for responsible capitalism as
soon as you have the chance. You know it makes sense.
Don’t fret about the fact that last year Lloyds tried to
sell hundreds of branches and couldn’t find a buyer. Ignore the fact that it’s
increasingly hard to find a fully-functioning bank branch in the high street in
any case because many have already been shut down.
This is all typical Miliband. Ignore the fundamentals of the
system and go for the froth. When he says that the problem is that the market
is dominated by a handful of banks, he is totally wrong.
While there is a concentration of power, the real issue is
that banks are run for profit and will do whatever it takes to increase their
shareholders’ wealth. When the previous Labour government completely
deregulated them, they racked up enormous profits which produced handy tax
revenues. All seemed well until the financial collapse of 2007-8 exposed their
operations.
Miliband thinks he can put the genie back in the bottle and
create an imaginary economy of regulated corporations that put their customers
first. In the real world, the opposite is happening. For example, the
Transatlantic Trade and Investment Partnership being negotiated between the
United States and the European Union is setting out to abolish whole areas of
regulation in the name of competition.
Existing (and even improved) regulations are simply subverted,
as with the supposed limits on bankers’ bonuses. Traders will simply get their
bonuses in another form and the show will roll on.
Miliband’s appeal now is almost entirely to the middle-class,
whose votes disproportionately affect the outcome of general elections. He said
as much in his article
in the right-wing Daily Telegraph
where he promised to “rebuild our middle class”, while the notorious shadow
education secretary Tristram Hunt laid into the teaching profession.
Just to round things off, Miliband is planning further steps
to substantially weaken the historic relationship between the trade unions and
the party they founded. In March, a half-day conference is scheduled to ratify
plans that are aimed at appeasing anti-union sentiment.
Miliband plans to end the electoral college system for
electing a Labour leader under which the trade unions have a third of the
votes. In addition, the present arrangements whereby members of affiliated
unions have part of their subs paid over to Labour will be scrapped in favour
of individual membership.
Some union leaders, most notably Paul Kenny, right-wing
general secretary of the GMB, have baulked at these plans and suspended funding
to Labour. But when push comes to shove, the majority will fall into line on
the grounds that a revolt could damage Labour’s chances at the 2015 election.
Yet if they were really intent on fighting for their
members, union leaders would be questioning the point of achieving Labour
success at the polls? What benefit would it be to their members to have
Labour-style austerity over that of the ConDems, or state hand-outs to firms to
subsidise a “living wage”, or attacks on teachers and other workers?
That union leaders would rather bury their heads in the sand
than raise these issues is testimony to the crisis of political representation
that ordinary working people are presented with. No one speaks or fights for
their interests any longer.
Paul Feldman
Communications editor
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