The governor of the Bank of England has been surprised that the British public have not been as angry with the banks as he thought they would be. Mervyn King told the treasury committee,"The price of this financial crisis is being borne by people who absolutely did not cause it," he said. "Now is the period when the cost is being paid, I'm surprised that the degree of public anger has not been greater than it has." The financial meltdown of 2008 is now being felt, yet widespread anger has yet to erupt. People are beginning to wake up to the reality that the governments £81 billion austerity cuts are linked to the banking crisis - the same crisis that has crippled Ireland.
Banks have continued to reward themselves massive bonuses while thousands of workers have lost their jobs, all of this comes after banks like Lloyds and RBS were bailed out by the government. British taxpayers were forced to handover almost a trillion pounds when the capitalist money markets failed. RBS recently reported an operating profit of £1.913bn (core RBS operating profit was £7.418bn) but told the government it could not afford to start paying back the bailout money. Unsurprisingly the bank somehow managed to find £950m to award themselves bonuses, with over 100 bankers earning more than £1m each. As Len McCluskey, the general secretary of Unite pointed out, "Taxpayers will be baffled as to how it is possible that while we own 84% of this bank it continues to so handsomely reward its investment bankers. This is an institution in which over 21,000 front-line and support staff have been sacked."
Barclays boss was indignant when he faced the Treasury Select Committee earlier this year, Bob Diamond told them, "There was a period of remorse and apology for banks. I think that period needs to be over." Just a few weeks later Barclays announced pre tax profits of £6.07bn and a bonus pool of £2.6bn, with investment banks seeing a salary increase by around 40% over the past year. As a result pay, pensions and bonuses per head at Barclays Capital have risen 20% to £236,000 on average - no wonder Bob Diamond wants to see an end of banker bashing. He must have been annoyed when it became public that Barclays paid just £113m in corporation tax in 2009. The bank was able to use tax avoidance rules in order to protect their bonuses, while at the same time the government began to force the British people to live with £81bn cuts to services.
What will it take for the British people to rise up and say "enough is enough"? Will it be the news that 37% of the FTSE 100 companies did not pay any corporation tax in 2010, while we have been forced to pay an extra 2.5% on VAT this year? Could it be the fact, Lloyds will not pay corporation tax until profits hit £15bn? The bank reported £2.2bn profits, while getting rid of some 26,000 workers since it bought HBOS - many of those former workers have a right to be angry with Lloyds for it's failure.
For the banks it is business as normal, clearly seen when Standard Chartered announced pre-tax profits leaping 19% to a record £3.8bn. The government must be pleased it is being able to rush through it's savage £81bn austerity measures with little or no protest from the vast majority of the British public. Mervyn King hit the right cord, even though his monetary polices and the system of capitalism are a failed system - there is anger at the banks and that anger is not going away. As the cuts begin to hit home and more and more people lose services and jobs, that anger will rise.
Many people are questioning the system and also see the failure of the main parties (Conservative, Labour and Liberal Democrats) as they deal with the effects of the financial meltdown. Scores of young people, sold out because of banker greed, are looking for alternatives to capitalism. A future of sky high university fees, youth unemployment nearing 1m and the prospect of being able to afford a mortgage a distant dream - young people are very angry. Anger will not be enough to change our society, we need to change the system.
A socialist society would see the banks and financial power houses taken into public ownership, ending the big bonus culture as surplus monies are channelled back into society. Instead of a small number at the top benefiting, society as a whole would see investment. Education would be a provided for free because a socialist society would be run differently to this greedy capitalist system. The idea of a democratic planned economy has been growing in a new generation of young people who have seen the terrible effects of capitalism - where the rich get richer while the poor get poorer as the ConDem government role back the advances made by the working class during the past 100 years. Labour no longer represent the working class as they mirror the right wing policies of the Tory party, having sacrificed workers to the gods of the financial markets. We need a new mass workers party and the Socialist Party (England & Wales) are building for this future - a future where young people receive an education that is properly funded, housing is created to ensure everyone can obtain a home at an affordable price and a banking system that is properly nationalised for the use in a planned economy that benefits society.
References:
* Telegraph - Corporation Tax avoidance , Mervyn King bank anger , Standard Chartered profits , Lloyds avoid corporation tax
* BBC - Barclays bonuses
* Daily Mail - Bob Diamond on banker bashing
* Socialist Party - Socialism
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