Monday, 13 October 2008

Public Ownership of the Banks

Today has certainly been a historic day for UK banks. There's no doubt about that. Taxpayers have taken around 60% of RBS shares and 40% of Lloyds TBS & HBoS shares. The Chairs and CEO's of HBoS and RBS are going.

It's being called a partial nationalisation of UK banks. Various conditions are being imposed. No executive bonuses for one year, representation of the government in the boardrooms, and other strings attached.

I do not believe it is adequate to deal with the full significance of what has happened to finance and banking. It does not match up to what is needed.

For a start, I don't like the term 'nationalisation' and the assumptions implied in that term. It is too closely linked to the old style monolithic state-run utilities set up in the early postwar years by Labour. The intention was good, but for the most part the organisations were run by recently retired military men and people who had no belief in what was being done. I'll settle for 'public ownership.'

I have no confidence whatever in the real intentions of the New Labour politicians. What they have done has been brought about by their own incompetence, and they see today's decisions as a temporary solution. As soon as they can get rid of the public ownership aspect, they will do so. Their interests have been privatisation, not public ownership. Just as the old boardrooms full of retired colonels had no commitment to what they were being asked to do, so New Labour has no real conviction in what they will be asking the reorganised banks to do. None of them has any belief or conviction about public ownership, it is opposed to everything they have done since 1997. The Cameron Tories and the Libdems are part of this neo-liberal mindset.

The banking crisis cannot be separated from the eco-crises around global warming, oil, energy, food and deforestation. What is required is not just token representation on the bank boards, but real control and direction of the entire banking and finance sector in the public interest. It needs to be green-led and organised in a devolved system, separated from speculation, gambling, greed and the market spivs.

This isn't what has happened today. It is something we need to make happen.

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