English Labour vows to look after Big Business and Finance
And neglect the needs of the People
Published in The National, June 18th, 2024.
English Labour keeps telling us who they are. I hope Scots are listening. Rachel Reeves’ latest message to the electorate is that big business and finance will be well looked after under an English Labour regime. She reassured them at a recent meeting in the City of London which included the heads of Lloyds Banking Group and Santander UK that their grubby “fingerprints” are all over the Labour manifesto. How reassuring.
She’s so deluded that she thinks taking advice from these economic parasites is the best way to ‘grow’ the economy. What economic value do the big banks contribute to the economy? Very little, in fact.
The big UK banks use just 15% of their balance sheet to lend to non-financial firms - the productive economy - and only 1/3 of this goes to small and medium-sized businesses and even that figure is falling. The bulk of their lending is for financial transactions for the purchase of non-productive fixed assets such as land and property. This leads to asset price inflation and the well-known phenomenon of housing bubbles. Prices are bid up and then the bubble inevitably bursts. No real value or productive capacity has been added to the economy. The rich grow richer, the shrinking middle class is squeezed and the poor grow poorer.
That’s the essence of financial capitalism. Like a leech, it sucks the lifeblood from the real economy. That’s why there’s no growth, Ms. Reeves. And that’s why an English Labour government doesn’t offer any change from the Tories’ disastrous policies.
Here’s an alternative. Scotland could establish a network of regional banks like those in Germany whose remit is to lend to small and medium sized businesses that are the real engines of economic growth and prosperity. But to do that, we first need to end the failing union.