Radical action on banks urged
New resolution proposed for Labour Conference
The Labour Party’s annual conference next week is due to hear calls for the party to be more radical in its policy towards banks. The Christian Socialist Movement and Vauxhall Constituency Labour Party are proposing a contemporary resolution for debate during the week.
The call to action comes in a month when Bank of England Governor Mervyn King told the TUC the financial system still needed ‘radical reform’ and conceded that the financial sector had let down the rest of the country.
CSM and Vauxhall CLP argue that recent attempts at bank reform have been too timid. The banking sector has also failed to reform itself and is continuing ‘business as usual’. Yet the profits banks now make are only possible because they were saved by the taxpayer and continue to benefit from implicit guarantees and historically low interest rates. Meanwhile, the crisis put an extra million people out of work.
CSM director Andy Flannagan said: “We’re concerned about the banks because the financial crisis hit the poor the hardest. While banks continue to pay very high salaries and bonuses again, those on low or no incomes are still suffering. Saving the banks means we have less to help the poor, both in the UK and around the world. We cannot afford another banking crisis, so Labour should lead in proposing radical reform.”
CSM’s conference delegate and Vauxhall CLP chair, Stephen Beer, is proposing the resolution. Mr Beer said: “We cannot stop people doing silly things and banks failing, but if we separate retail banking from riskier casino banking we can stop a failing bank bringing down the whole system. It is time to make financial policy for the many, not the few.”
The CSM/Vauxhall CLP resolution reads as follows:
"Conference notes that the Bank of England Governor told the TUC conference that “our financial system needs radical reform” and that the fall out from the financial crisis is “affecting everyone, and will continue to do so for years to come.” Banks took on too much risk and retail banking was too entwined with investment, or ‘casino’ banking. However even piecemeal attempts at reform have failed: bank shares soared when new regulations were announced in September. The appointment of a new Barclays CEO shows that investment bankers remain in control. Easy monetary policy means banks are again earning large profits and bankers’ pay continues to be excessive. Meanwhile, millions of workers are suffering unemployment, job insecurity, and low or no pay increases despite inflation at 4.7%.
Conference urges our new leader and our National Policy Forum to make financial policy for the many not the few. Bank failures should never again lead to millions out of work. Labour should not let the Tory/Liberal government, with its banking commission, dominate this debate. Banking activities require radical reform, as even Mervyn King has recommended. President Obama forced through reforms despite bank protests. Reports that UK banks might leave the UK should be treated in the same way. Britain under Labour led international action to tackle the crisis and should do so again. Therefore Conference asks our NPF to re-evaluate the case for a legal separation of banking activities so UK finance can thrive without threatening personal savings or people’s livelihoods."
The resolution will go into a ballot on Sunday 26th September to decide which contemporary resolutions conference delegates wish to debate.