Why We Should Be Angry With The Banks

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:

* Guardian - Lloyds bonuses , RBS profits 

* 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

Royal Mail Sold Out

The Tory and Liberal Democrates have voted to sell off Royal Mail, with only the House of Lords being able to stop the destruction of this much loved public service. Although Labour were against privatisation this time, we need to remember that Labour sought to part-privatise this 350 year old service.

In private hands Royal Mail will transform from a daily universal UK delivery into a post code lottery, where those in cities will be cherry picked and those in rural areas will eventually see the daily delivery of post eroded and eventually wiped out.

A privately owned Royal Mail will no longer be willing to offer a 'one price goes anywhere'. The logic of cost will compel any capitalist company to exert the maximum profit and posting a letter from Lands End to John O'Groats does not fit into this business model.

Separating Post Office Counters from Royal Mail will signal the end of the Post Office, as the two companies will quickly go their separate ways and the interwoven link will fray. As Royal Mail loses a third of it's income from the Post Office both will become more fragile.

Not only have Royal Mail been sold out by the coalition, the British public will be worse off as this public service will be lost forever. Margaret Thatcher sold off our gas, electricity, water and railways, Labour opened the door for privatisation of Royal Mail, education and our health service. It is of no surprise then that Cameron and Clegg want to get their greedy hands on our remaining public services and sell them to their business friends.

We need to continue to oppose the sale of Royal Mail and call for the investment into the Post Office, as communities and businesses rely on this publicly run service. What next - will we see the BBC sold to the likes of Rupert Murdoch? Privatisation of Royal Mail was defeated before (on it's final reading) as Michael Heseltine was forced into retreat because of the public outcry. A Socialist government would make sure the postal service remained 100% in public hands and used for the benefit of all, not for the greed of the few.

Nationalise The Banks - End The Crisis!

Barclays Bank Chief Bob Diamond has exposed the banking sector for what it really is as he showed no remorse for the banking crisis Barclays helped create. No wonder he said banks should not be relying on British taxpayers for bailouts, his bank refused to go to the government for help. Instead Barclays went to the Middle East and borrowed £5bn from investors. Had investors not come forward, then Barclays would have relied on a bailout like RBS and Lloyds Bank.

Questioned by a committee of MP's, Bob Diamond displayed arrogance and offered little in the way of answers. While we are forced to pay for the bankers casino gambling through spending cuts, Diamond thinks it is time to put the crisis behind us. Maybe he should tell that to all the families who will continue to lose jobs because of the banking crisis. He expects us just to move on and forget BANKS caused this crisis! While it is back to business for the banks - rewarding themselves with MASSIVE bonuses for failure, it will be years of lower living standards for millions of people as the government pays back the money (with higher interest rates!) it borrowed to bailout the banks. So much for the coalition government getting tough on bankers, little surprise as the multi-millionaire ministers look after their own!

Banks are expected to pay out £7bn in bonuses over the coming months and Barclays boss is expected to earn £8.5m. If the banks were all nationalised properly, then the surplus that banks create could be used for the benefit of all. We need a planned economy that ends the grossly outrageous greed of business and run society in a different way. Capitalism is failing, we are propping up this dying system at the cost of declining working conditions, increased poverty and attacks on public sector services.

Only when the consciousness of the working class is raised to see how the ruling class are trying to keep us down, will we be able to rise up and change society for the better.

*PIC: This Is London

Workers Lose Out Yet Again

UK workers have either had a pay freeze, pay cut or a very small rise in recent years, as the official chart shows above. As employers complained of hard times, workers had to be grateful for a job - for many that meant taking a pay cut or freeze back in 2009. By August 2010 the average pay increase was just 2%, still over 50% down on August 2008. Notice how the big bank bonuses made a return earlier this year, a further insult to UK workers who are being told they have to pay for the bankers crisis of 2008.




Now look at the UK inflation figures (pictured above) from the same period, you would expect that if workers pay increases slower, then prices for goods would rise slower. Instead we see prices rising at a faster pace, resulting in those workers who were lucky enough to even get a 2% wage increase in 2010 actually losing out. The millions of public sector workers are even worse off, as rising consumer goods would mean they were about 3% poorer. Women fare even worse as the Office of National Statistics show that clothing and footwear has increased 6.4%, a record rise in August and September 2010. The UK rate was 3.1 per cent whereas the EU’s as a whole was 2.0 per cent, meaning that UK shoppers were paying even  more overall than our European neighbours.

The markets and business leaders will be happy with these figures because it keeps workers pay down, resulting in higher profits for the company. This has not been fed back into the labour market - unemployment figures for 2010 prove this. Instead business leaders are paying off any debt while rates are so low, buying back shares and reducing total dividend payouts and many companies now have a cash surplus thanks in part to rising inflation and lower wages.

The UK government announced that Capital Gains Tax would be reduced to 28%, the lowest in Western Europe and the lowest rates ever for UK business. Yet it is ordinary workers who lose out as the markets just look after their own and seek to keep the working class down. Wealth will continue to remain in the hands of the few, instead of being distributed for the needs of society. Only an alternative to this capitalist culture can really make it a fairer world. A Socialist alternative would result in fair wages and a re-distribution of wealth as a planned economy takes shape. For more reading, visit:  http://www.socialistparty.org.uk/

*Both charts are from the UK Office of National Statistics