MAKE THE CITY WORK FOR THE PEOPLE
The Communist Party welcomes the growing campaign to highlight the role of the City of London as a step forward in the fight to make the financial sector in Britain work for its people. Britain has one of the most powerful financial sectors in the capitalist world. In the City of London, banks, insurance companies, pension funds and investment vehicles speculate on a massive scale, dealing in currencies, bonds, shares and financial instruments like securities and derivatives, engaging in complex bets on movements in their value. Its mouthpieces in the Coalition government claim that it creates wealth for Britain. But the Communist Party says that the City is crippling our economy, strangling the sources of growth and preventing the building of a fair society.
Five ways in which the City is damaging Britain: 1. The banks’ speculation has left them in massive debt, with loans that are 35 times their capital base, damaging economic growth and making further financial crises more likely. 2. Insurance firms and pension funds export workers savings overseas by investing in short-term financial instruments that make high profits, rather than funding investment in vital infrastructure or domestic industries – the things that people need. 3. Banks now own controlling shares in most major companies in Britain and they sacrifice long-term investment for short-term ‘shareholder value’. That’s why British industry has failed to modernise or compete. 4. The banks also own and trade in public sector debt through Private Finance Initiatives and other ‘partnerships’, forcing hospitals and schools to cuts costs to pay their debts. They are parasites on the taxpayer. 5. The big banks threaten to relocate abroad if there is any attempt to regulate them more closely, while the credit rating agencies threaten to ‘downgrade’ countries if they moveaway from neoliberal policies, effectively holding democratic governments to ransom to protect the right to speculate.
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The Communist Party says that we can no longer accept the dictatorship of the City of London. No real progressive change in Britain is possible without first challenging the power of finance capital in the City. Relying on regulation will never be enough, nor will simple calls to end capitalism. Britain’s Communists argue for a set of concrete measures to challenge the City’s power as part of an Alternative Economic Strategy that would unite the broadest mass of people against the biggest threat.
Five measures to challenge the City dictatorship: 1. Capital controls, to prevent speculative investment in currencies or derivatives and ‘repatriate’ capital that is flowing overseas. 2. Closure of the tax havens that allow banks to indulge in speculative investments and avoid taxes, together with raising corporation tax.
3. A Robin Hood tax to discourage speculative currency transactions, alongside other taxes on short-term speculative investments. 4. Take full public and democratic control of HBOS and RBS and make them national investment banks. 5. Use of these national investment banks to provide long-term finance for new socially owned companies specialising in renewable technologies. This will help achieve a sustainable Britain with new hi-tech industries for which there will be growing domestic and international demand.
These policies would: • discourage speculative behaviour and channel investment into job creation and the development of new industries making things that people need • raise tax revenue that could be used to invest in rebuilding and extending our public services • they would be a first step in taking democratic control of the City and forcing it to work for the people.
How do we win these policies? The mainstream political parties are afraid of the banks and the financial sector. Only democratic pressure from a mass movement will change that. Britain’s Communists are working in the trade union movement, the mass organisations of working people, and the anti-cuts movement, to highlight the need for an alternative economic and political strategy. Through the People’s Charter and recent calls for an Alternative Economic Strategy, the unions are beginning to take up this fight. Cuts campaigns and direct action groups are turning their attention to the City, playing a vital role in bringing public attention back to the role of the financial sector. It’s time to unite these campaigns and build them on the broadest possible basis. We need more unity between unions, cuts campaigns, climate change campaigns and the campaign against the City.
CPB LONDON
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