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Miliband's dream of a new, improved capitalism

Ed Miliband’s half-baked proposals to increase competition between high street banks – not exactly a burning issue for most working people – just about sums up the Labour leader’s vision of the “responsible capitalism” he champions.

In this Miliband dream world, the top five avaricious banks that regularly fleece their customers with all sorts of charges – when they are not busy precipitating a financial collapse that is – will be made to sell some of their branches.

Somehow these will be bought by a new entrant into the banking sector and, lo and behold, competition will increase and bring a better deal for customers. And this is One Nation Labour’s outlook: better markets, more competition, new and improved capitalism.

Who can fail to be swept off their feet with the excitement of it all! The intellectual power of this argument is too stunning for words. So don’t think about it – get out there and vote for responsible capitalism as soon as you have the chance. You know it makes sense.  

Don’t fret about the fact that last year Lloyds tried to sell hundreds of branches and couldn’t find a buyer. Ignore the fact that it’s increasingly hard to find a fully-functioning bank branch in the high street in any case because many have already been shut down.

ignore the fundamentals;
go for the froth

This is all typical Miliband. Ignore the fundamentals of the system and go for the froth. When he says that the problem is that the market is dominated by a handful of banks, he is totally wrong.

While there is a concentration of power, the real issue is that banks are run for profit and will do whatever it takes to increase their shareholders’ wealth. When the previous Labour government completely deregulated them, they racked up enormous profits which produced handy tax revenues. All seemed well until the financial collapse of 2007-8 exposed their operations.

Miliband thinks he can put the genie back in the bottle and create an imaginary economy of regulated corporations that put their customers first. In the real world, the opposite is happening. For example, the Transatlantic Trade and Investment Partnership being negotiated between the United States and the European Union is setting out to abolish whole areas of regulation in the name of competition.

Existing (and even improved) regulations are simply subverted, as with the supposed limits on bankers’ bonuses. Traders will simply get their bonuses in another form and the show will roll on.

Miliband’s appeal now is almost entirely to the middle-class, whose votes disproportionately affect the outcome of general elections. He said as much in his article in the right-wing Daily Telegraph where he promised to “rebuild our middle class”, while the notorious shadow education secretary Tristram Hunt laid into the teaching profession.

Just to round things off, Miliband is planning further steps to substantially weaken the historic relationship between the trade unions and the party they founded. In March, a half-day conference is scheduled to ratify plans that are aimed at appeasing anti-union sentiment.

Miliband plans to end the electoral college system for electing a Labour leader under which the trade unions have a third of the votes. In addition, the present arrangements whereby members of affiliated unions have part of their subs paid over to Labour will be scrapped in favour of individual membership.

Some union leaders, most notably Paul Kenny, right-wing general secretary of the GMB, have baulked at these plans and suspended funding to Labour. But when push comes to shove, the majority will fall into line on the grounds that a revolt could damage Labour’s chances at the 2015 election.

Yet if they were really intent on fighting for their members, union leaders would be questioning the point of achieving Labour success at the polls? What benefit would it be to their members to have Labour-style austerity over that of the ConDems, or state hand-outs to firms to subsidise a “living wage”, or attacks on teachers and other workers?

That union leaders would rather bury their heads in the sand than raise these issues is testimony to the crisis of political representation that ordinary working people are presented with. No one speaks or fights for their interests any longer.

Paul Feldman
Communications editor
17 January 2014

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