UK opposition says big London banks must never again be ‘masters of the economy’

Monday, 17 September 2018 00:00 -     - {{hitsCtrl.values.hits}}

London (Reuters): London’s vast financial sector must never again be the “masters of the economy”, the finance spokesman of Britain’s opposition Labour Party said, accusing bankers of profiting from speculation at the expense of ordinary people.

John McDonnell, a veteran socialist who is now seeking to reassure business, promised higher taxes and tougher regulation on banks on the 10th anniversary of the collapse of Lehman Brothers – the pivotal moment in the global financial crisis.

“The key lesson is this: never let the finance sector become the masters of the economy when they should be the servants of the economy,” he said in a speech outside the Bank of England on 15 September.

He said ordinary people were still paying the price for the crisis through falling living standards and cuts to public services, and a Labour government would redress the balance.

With Prime Minister Theresa May’s government weakened by her Conservative Party’s infighting over Brexit, Labour is hoping her minority government will collapse.

Most recent opinion polls show Labour level with the Conservatives, meaning they could form the next government, although the next election is not due until 2022.

Labour would introduce a financial transaction tax to extract more revenue from the City of London by expanding an existing tax on shares to trading on other assets such as bonds and derivatives.

“The finance sector has a responsibly to deliver the resources that we need,” he told the rally held by a variety of unions and campaigns including one called “Change Finance”.

Despite his previous antipathy towards bankers, McDonnell is trying to win the support of financial bosses, just as former Labour leader Tony Blair helped prepare his party for power with what was dubbed the “prawn cocktail offensive” in the 1990s.

For example, McDonnell went for talks with the Wall Street bank Goldman Sachs earlier this week to discuss Britain’s upcoming departure from the European Union.

He said his message when holding meeting with bankers and asset managers was simple: “You’ll get a decent rate of return but we’re not being ripped off anymore. Ripped off by speculation, privatisation, job cuts, and exploitation of workers.”

A Labour government would also try to end tax evasion and tax avoidance, and seek to tackle the issue of overseas companies owning properties in London, which he said has caused speculation and forced up prices.

Anti-capitalism group targets French banks a decade after Lehman Brothers demise

Paris (Reuters): Anti-globalisation activists threw black liquid soap across the glass-front of a bank in Paris on Saturday, one of several actions planned in France and Germany in protest against banking practices a decade after the collapse of Lehman Brothers.

Railing against tax fraud and mega-investments in fossil fuels by the world’s biggest banks, the protesters in the French capital lit orange smoke bombs and spilled a fluorescent green liquid on the pavement to symbolise what they called toxic money.

“Big banks are a driving force of fiscal evasion,” said Aurelie Trouve, a spokeswoman for Attac France.

Thomas Coutrot, another member, said he was convinced that ten years after the collapse of Lehman Brothers the global economy was heading for another crisis.

“It’s inevitable, there’s going to be another crisis,” Coutrot said. “It’s absurd and we’re not giving into that.”

The demise of Lehman Brothers, a US investment bank, triggered the onset of the global financial crisis from which much of the industrialised world has yet to recover.

Some key euro zone economies are still not back to their pre-crisis size despite a decade of stimulus and there has been a sharp fall in support for traditional centrist parties, especially on the left, as anti-establishment parties surge. 

In Frankfurt, home of the European Central Bank, Attac protesters strung up “crime scene” tape in front of the Stock Exchange and daubed a bull statue with paint.

“We want to use this event to make clear that we want a different financial system, one that is not unstable, which is democratically controlled and which does not exploit humans and nature but is beneficial to humans and nature,” said Alfred Eibl, Attac spokesman for taxes and financial markets.