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Published letters on banking and the economy
• Takeover Betrayal - Feb 2010 • Party Funding and Voting reform - Feb 2010 • Radical rethink of economy needed - Dec 2009 • Bank debt and the Government - October 2009 • Creating a new economy for the 21st Century - Jun 2009
Takeover Betrayal - February 2010 The betrayal of the British public by this Labour government over the takeover of Cadbury becomes clearer by the day. While other European nations protect their manufacturing industry and jobs, this government On 20th January the Lib Dem leader, Nick Clegg, protested in Parliament that Royal Bank of Scotland was lending money to finance Kraft’s takeover bid. Mr Clegg said: "When British taxpayers bailed out the banks, they would never have believed that their money would now be used to put British people out of work. Isn't that just plain wrong?" Gordon Brown responded, “there is no government that is doing more to try and protect jobs and increase jobs in this country." On 10 February, days after taking control, Kraft announced the closure of Cadbury’s Somerdale factory in Keynsham, with the loss of 400 jobs. By last December, the government bailout of UK banks had reached £850 billion, a debt we will be repaying for years. RBS bank managers, having helped Kraft buy Cadbury, are trousering £1.5 billion in bonuses. The government, which owns 85% of RBS, does nothing. Last week Vince Cable said, “The main power that governments used to have in relation to takeovers was the public interest test and this was thrown away in 2002.“ Put another way, most nations protect their assets but we will sell foreign companies anything and everything, and even lend you the money to buy it. York saw how Kraft operated when Terry’s was bought. The factory closed. The jobs went to Poland. Mandelson and Brown content themselves by printing more money and talking about a fairer Britain.
Party Funding and voting reform - Feb 2010 We have a Labour Prime Minister who has consistently opposed voting reform suddenly having a deathbed conversion and organising a vote on the issue in the House of Commons, in the certain knowledge that there probably isn’t time to put anything into law before the general election. We have a Tory leader saying "For years all parties have taken the same view that someone's tax status is a matter between them and the Inland Revenue. That needs to change.” At the same time Cameron allows Lord Ashcroft, a man who sits in the House of Lords, to continue financing the Tory election campaign while consistently refuses to declare his tax status. And they wonder why the public doesn’t trust them. What these two gentlemen have in common is an ability to separate talk from walk. They talk about restoring trust but prefer the status quo. They talk about reform but don’t want substantive change. It is rotten that we have an electoral system where, across the nation, it takes around 30,000 votes to elect a Labour MP, 50,000 votes to elect a Tory MP, 100,000 votes to elect a Lib Dem MP. In any other circumstance this would simply be described as unfair and unrepresentative, and put right. But in politics, those in power make the rules. It is rotten that both major parties refuse to clean up party funding. The Electoral Commission, investigating Ashcroft’s tax affairs for 16 months, describes the situation as ‘complicated’. In what way? Is Ashcroft paying tax in the UK or not? The government is in no hurry to sort this out before the general election because any solution would also affect Labour’s funding from trades unions. The expenses scandal has still not brought politics to its senses.
Radical rethink of economy needed - Dec 2009 As UK public borrowing reaches a new high, with £23.3 billion borrowed last month, we need a fundamental rethink of our economy. Unemployment continues to rise and we are still in recession. Our national debt is higher than at any time since the Second World War and yet, instead of rationing, most people are continuing to live as if there were no crisis, and our government’s mantra is spend, spend, spend. This cannot go on indefinitely. A nation which spends but doesn’t produce is simply incurring debt. Like shopaholics wanting a quick retail therapy high, the feel-good factor will be short-lived. Contrary to the fantasies of bankers, the banks are not currently making profits, they are simply hoarding the vast amounts of money that has been given to them by the government in the wake of their catastrophic collapse. Instead of allowing the banks to sit on our money, and give each other bonuses, this money must be used to create wealth and to transform the nation’s infrastructure. Bankers are not the sole cause of the problem, however. The complicated and discredited financial packages they created, particularly with regard to mortgages, occurred because the pensions industry is also in crisis. With interest rates at historic lows these past few years, the pensions industry has been desperately seeking investments that would give a good rate of return. The banks obliged by making up complicated products that appeared to offer much better rates. The illusion was understood by many trading in these commodities but no-one had the courage to say so publicly. We need leaders with the courage to face up to the real challenge of transforming our economy for good, to ensure our nation’s future. We don’t need leaders who will print more money but leave everything else the same.
Bank debt and the Government - October 2009 The government’s direct or guaranteed investment in banks is close to one trillion pounds. This staggering amount is a million million and looks like this: £1,000,000,000,000. And yet bankers are busy rewarding each other £6 billion in bonuses for what they obviously see as a successful year. Their ‘success‘ is the result of them being given our money in the wake of their spectacular failure to look after our money that they already had. Now we have a trillion pound debt our children and grandchildren will be paying long into the future. Why has the separation of high street banking from speculative high risk banking not taken place? The governor of the Bank of England, Mervyn King, has said that “the belief that appropriate regulation can ensure that speculative activities do not result in failures is a delusion.” In other words, there is no guarantee that we won’t get into the same mess again a year from now, five years from now. What will we use to bail them out next time? In the meantime there is no indication that either Labour or the Tories understand that it is not a return to business as usual that we should aspire to; we need to create a new economy fit for the challenges of the 21st century. Our economy must not be reliant on banking. For a start we must invest our energy pounds in the UK, creating hundreds of thousands of jobs in renewable technology industries instead of spending billions importing oil, gas and coal from dodgy regimes that either nurture or provoke global insecurity. I would rather spend money on that than subsidising undeserved bonuses for bankers.
Creating a new economy for the 21st Century - Jun 2009 With the news that the UK economy has contracted by 2.4% in the first three months of this year, the biggest quarterly decline in 51 years, and a warning from the world bank that the British economy risks relapsing into further serious recession, it is worth setting out again the opportunity facing us.
Published and promoted by Christian Vassie, 10 Blake Court, Wheldrake, York YO19 6BT
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