In a week of momentous events in Egypt, it would be easy to miss the mainstream media in Britain providing the stage for the banks to be brazen again. Last Tuesday, as Egypt erupted in the background, the paltry size of the tax mechanism – or levy – the Conservative-led government in Britain is 'imposing' on super-profiting banks was top story on the BBC's domestic news agenda.
Should the banks pay back the tens of billions the government loaned them to bail them out in 2008 or should the millions of people who had nothing whatsoever to do with wrecking the economy pay it back instead, destroying the social infrastructure of the country in the process?
That wasn't quite the question BBC finance reporter Robert Peston was addressing. He wouldn't get away with that. That was the question he should have been addressing. The Peston approach to finance capital’s measly contribution to its debt repayments was much more timid and delivered in a manner devoid of provocation or controversy. It was BBC ‘balance’ and ‘unbias’ in action. Peston ermed and he aahed then his face contorted with discomfort as he discussed the bank levy. The Beeb's man of the City did his upmost to avoid taking sides in a debate between a handful of billionaires and the overwhelming majority of working people.
The Tory-led government is increasing the levy so that it will bring in around £2.5bn a year. Sounds a lot, but this amounts to less than 10 percent of bank profits in 2010 and these are expected to be significantly higher this year. The whole facade was framed by the media in the manner the Tory-led government wanted it – as an agreement to settle a ‘war’ between bankers and the Tories. Was it enough? Did the Tories triumph? Or did the banks prevail? The dark truth is different.
A massive £81bn is to be creamed off the tax revenues of ordinary working people – who played no role in the creating the crisis – over the next four years. This is an average of £20bn a year. Compare £20bn with £2.5bn and factor in who caused the crisis – then pause for thought.
The Tory Party and the banks are in it together and they are waging a brutal class war against ordinary working people.
Banks create crisis, working people pay
The banks took our savings, our pensions, our mortgage and loan repayments and loaned the money to people who couldn't pay it back, mainly poor Americans. This reckless exploitation by the super rich almost collapsed our entire economic system. Our ability to eat, work, live healthily and bring up our kids safely was literally under threat.
The £81bn the government is siphoning from tax income would normally be spent on schools, hospitals, housing, social security, post offices, libraries and local & rural infrastructure – things that are essential to community and the health and well being of most people. If the bank levy was tripled, multibillion-pound banker bonus pools cancelled and their salaries brought under control, the £81bn would be paid off in around six years. This way, the debt would be paid off, the banks would still have high profits, but public services would remain intact.
Governing in the interests of finance capital
The Tory-led government has sought to present itself as a benign regulator throughout, trying to control the banks and bankers in the face of globalisation. The Tory Party – in this guise – is simply driven by its own ideals of individual freedom and free markets. But this is the great deceit of liberal democracy that hides the real power from view.
A report only a day after Peston’s report appeared on TV showed that – shock, horror – the Tory Party receives over half its funding from finance capital. The day after that, the government-bank voluntary agreement on salaries and bonuses, Project Merlin was unveiled and widely attacked as being a bankers' wish list. Without the funding from the banks the Tory Party would not be able to fight elections effectively or run on a day-to-day basis without bank funds. The Tory Party can only function if it does the bankers' bidding.
Peston did offer another explanation as to why the bank’s contribution was so low. He used a word that has not been bandied about since the crisis in 2008. Neoliberal apologists have been laying their heads down low since then until now. Peston simply said: "Globalisation isn't fair."
For those who thought that word had gone down the sewage system with those toxic, subprime mortgages, the message was clear. Globalisation – one of the most favoured ideological euphemisms for unbridled capitalism – is back in vogue. What Peston meant was that the banks, like pre-crisis times, can simply leave and set up office in another part of the world where a tax regime was friendlier towards them if they don’t like the tax regime here. Nothing has changed.
Those same banks who accepted the billion-pound bailout could up-and-off rather than pay back their own debts. Put another way, rather than alleviate the pressure on British society, they make barely veiled threats to flee sending the Tory-led government to wades in eagerly to public services instead.
Globalisation is not a politically neutral mystical phenomenon like some kind of social ether. Pro-banker governments have cleared the barriers to cross-border capital movements across the world. And they keep them cleared.
The need for revolutionary change
The banks have demonstrated that they are too engrossed in their own enrichment to do the one thing they could arguably be good for responsibly. Although they are motivated purely by selfish capital accumulation, this dynamic leads them to lend money to companies, generates economic growth and with it the jobs (under conditions of exploitation of course) and the goods we want and need for our consumption.
The one justifiable reason – if you accept the exploitation inherent in our system – for not forcing banks to pay off all their own debts is that the banks need sufficient capital to play out this role as lender to productive sectors of the economy. But it is clearly far too dangerous to allow unfettered finance capital to do that. With mainstream political parties bought off by the bankers, our democratic system is in tatters. The whole system is broken and we need a new one.
The one justifiable reason – if you accept the exploitation inherent in our system – for not forcing banks to pay off all their own debts is that the banks need sufficient capital to play out this role as lender to productive sectors of the economy. But it is clearly far too dangerous to allow unfettered finance capital to do that. With mainstream political parties bought off by the bankers, our democratic system is in tatters. The whole system is broken and we need a new one.
Three things come to mind immediately on this. Firstly, the need for a new setup that doesn't depend on our democratic representatives being in bed with kleptocrats. Secondly, an alternative system that doesn’t depend on the exploitation of the majority by a tiny economic elite would be no bad thing either. Finally, the almost total absence of the political or (conscious) economic forces capable of articulating that alternative to a wider audience, never mind bring it about.
Tilting the balance of power in favour of working people will be no easy task. The BBC and other mainstream media outlets are so biased in favour of the status quo so they are blunt instruments for providing critical information to the public about alternatives. They are the only sources of economic and political news people get yet they conspire with power to control information and to ensure alternatives unacceptable to the centres of economic and political power don't emerge.
Consequently we are routinely bamboozled or bored stiff by finance news. The US military could do worse than play Peston's finance reports to prisoners at Guantanamo Bay as a form of torture in order to extract confessions from inmates. But the media propaganda system is just the tip of the iceberg.
In Britain, the traditional force of trade union power is a shadow of its former self and most union leaders seem reluctant to get militant to defend jobs, homes and communities. Grassroots union organisation has been neglected so the culture nurtured by unions in workplaces, once strong, is virtually non-existent. Politically, a large rump of the left still doesn’t know how to deal with absence of a Labour Party that long-since mutated into the Tories.
The only hope left is spontaneous fury on the streets.
The students have already set a good example. The militancy and fearlessness of a large section of them in the face of the police on December 8 2010 was just what is needed. Also, the direct action by the group UK Uncut against retail stores such as Topshop has also been impressive (but why not hit the City?). A lot of hope too has been put in the relatively conservative Trades Union Congress demonstration in London on March 26. More militant union activists see it as a vehicle to express worker anger at the bankers and the cuts. They also intend for it to be a launchpad for more serious industrial action (Getting from the former to the latter will be no easy task!).
But if no movement is built to resist the public-service cuts in Britain (and elsewhere) and more generally to confront the Tory-led government and its paymasters, finance capital will remain in the driving seat.
Bankers will continue to put their own wealth creation above all else, leaving our society to stagnate and our schools and hospitals to rot.
Celebrating the revolt in Egypt, has John Pilger referred to the possibility that something similar could happen in London or Washington DC, two "fragile and barely democratic regimes."
Pilger thinks the propect is possible. Let's hope he is right.
Steven Mather
Journalist, trade unionist and political activist. Born and raised in the industrial north east of England. Now living in Hackney in the east end of London. Spent several years in Latin American, in particular Mexico, Colombia and Venezuela.
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