By Mohan Sen
The Financial Times reports that Labour has “embarked on a charm offensive with banks and fund managers”, “drawing a veil over its previously fraught relationship with banks and fund managers under the leadership of Jeremy Corbyn”.
The Shadow City Minister, Labour right-winger Pat McFadden, is leading this grubby initiative, holding “a series of meetings with banking and asset management representatives”. McFadden was a business minister under Gordon Brown and before that worked for Tony Blair. Shadow Chancellor Anneliese Dodds is also playing a central role.
The FT quotes senior financial figures lauding a “sea change” and a “completely different approach” from Labour under Jeremy Corbyn and John McDonnell.
What is ironic, and makes this particularly alarming, is that the Corbyn-McDonnell leadership was in practice far from hostile to the banks and finance. In 2018-19, McDonnell embarked on his own attempted charm offensive, even telling bankers that a Labour victory “would bring them into government”. McDonnell’s previous support, up to 2015, for public ownership of the banks and high finance was dropped completely.
Clearly this was not good enough for the bankers, who were upset by moderate statements from the former Shadow Chancellor about salaries and bonuses and about the banks’ role in the 2007-8 economic crisis – to say nothing of the Corbyn leadership’s left-wing past and sympathies, and other left-wing Labour policies.
The FT article cites concerns about “the party’s leftwing agenda [under Corbyn], such as its plans to nationalise utilities and increase corporation tax” – suggesting that Starmer and McFadden’s pitch to the lords of high finance is that these basic social democratic policies are being abandoned.
“I’ve always believed that an aspiring party of government should be as interested in wealth creation as it is in the fair distribution of wealth”, says Pat McFadden. This is obviously code for retreating back towards a neo-liberal agenda. Anyone who doubts this should note McFadden’s bizarre comment that the financial sector has faced “a cold climate politically in recent years” and his criticism of the Tories for being too anti-banker.
Who disagrees with “wealth creation”? Not left social democrats like Jeremy Corbyn, and not even us socialists. We simply believe that those who create the wealth – workers – should take ownership and control away from the non-wealth creators who currently have it.
Short of carrying that out in a thoroughgoing way, there are undoubtedly industries we should demand public ownership and democratic control over – and in this crisis banking and finance, along with for instance social care and the pharmaceuticals industry, should be at the top of the list.
The FT notes that Starmer’s “move comes as asset management is increasingly moving up the political agenda as a result of its rapid growth and importance in providing financing for companies, a role that is set to be turbocharged in the post-coronavirus recovery”. That reality does not mean that the labour movement should crawl to bosses of the financial sector, but that it should fight to break and take over their power by taking the sector under public ownership and democratic control.
This policy was passed at TUC Congress in 2012 and last year, but has not been campaigned for.
The Investment Association, which represents UK “investment managers”, said: “A constructive and open, even if at times robust, dialogue with political parties on all sides of the house is critical, not only to the good functioning of our economy but for our democracy too.”
In fact the role of the banks and financial institutions is self-evidently disastrous for democracy and for any hope of reorganising the economy in the interests of the majority (let alone moving towards socialism).
Faced by Starmer’s shift to the right here, the left needs to abandon its cautiousness and ambiguity on this issue – motivated in large part by a desire not to embarrass Corbyn, as well as more general conservatism and lack of ambition – go beyond anti-banker populism, and start seriously discussing the demand for public ownership of finance.
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