Thursday, 21 January 2016

Labour's Economic Radicalism

This is more like it. From the BBC:
The Tories have offered a Right to Buy, Labour would seek to better this. We'd be creating a new Right to Own," he [John McDonnell] said in a speech in Manchester.

He said the "biggest hurdle" facing co-ops and other small businesses was getting initial funding from high street banks.

"No other major developed economy has just five banks providing 80% of loans. We'd look to break up these monopolies, introducing real competition and choice.

"Regional and local banks, prudently run and with a public service mandate, have to be part of the solution here."

Mr McDonnell is also considering adopting the Italian government's policy of offering funding to help employee-owned enterprises to get off the ground.

"With consortium co-operatives providing an effective means for new businesses to share and reduce costs, we'd look to support these at a local level, working with local authorities, businesses and trade unions," he said.
This is excellent. It was frustrating that the 2010 and, to a lesser extent, 2015 manifestos paid lip service to the radical potential of the cooperative movement, but did effectively nothing with it. To put it front and centre in our critique of Tory economic policy makes them difficult to pigeonhole the party as fans of state-owned industries. As Greg Hands put it in his response to John's speech, "Now we know the truth: Labour is planning another debt-fuelled spending spree and a huge tax bombshell on the businesses that have helped to drive Britain's recovery from the economic mess they left behind." A complete non-response in other words.

I hope over the coming months this is rammed home as much as possible. 'Right to own' has a nice ring to it, and as we can see above the Tories have no real reply.


Speedy said...

Except it betrays absolutely no understanding of how the finance sector actually works.

But i suppose they can say anything, really.

Fulcrum said...

There's also talk about breaking up monopolies (well, cartels, if we're honest) and lowering barriers to entry, which is surely the baseline of functioning capitalism beyond anything else, and gives the lie to whatever the Conservatives say about entrepreneurship.

Given how he may be the furthest left part of the CLAM (Corbyn-Livingstone-Abbott-McDonnell), it's weird how I find McDonnell to be the one coming out with the most sensible ideas. (Although it may be because Shadow Chancellor blocks him from talking about foreign policy).

jim mclean said...

Germany has only two major banks but it has around 30 regional/district banks and over 200 savings banks plus co-operatives. So no problem with local banks at all, I remember when Scotland had five banks producing notes and every town had an independent savings bank. The new empowered credit unions are now emerging as the new not for profit local banks. Our local one will actually give a crisis loan to families who are non members. So the man is not shooting from the hip. As for how banks work, they work according to the law, deregulation was not set in stone.