Ed Miliband’s speech on the banking sector screams of a party trying to move beyond the status quo to a politics of transformation but unsure how this is done. We should welcome this fluidity, point out where and how they need to develop and help them in the process.
Firstly, the framing/vision of the speech. Labour are juxtaposing the ‘race to the bottom’ that the Tories are engaged in with a ‘race to the top’ economic strategy. The implied reason for a different economic strategy is to solve the ‘cost of living crisis’ by raising standards of living. In and of itself this is no bad thing but surely a better frame would put ‘the economy’ in its rightful place, as a means to an end not to an end in itself. The end is never properly fleshed out and a race to anywhere surely can’t be a vision of a good society that we can all buy in to. Indeed it can’t be a race because there is no finishing line. It’s just an endless slog. Being human means doing better than that.
Throughout the speech there is no real acknowledgement of environmental limits. ‘Longtermism’ ‘is a theme but ‘longtermism’ seems to be more of a by-word for stable business investment not an acknowledgement of the serious environmental challenges we’re facing.
On the tone of the speech. When talking about people’s everyday anxieties of working hard and not being able to pay the bills the rhetoric is closer to a political language that we’re crying out for; human scale, softer, empathetic. The problem is that the language reverts to policy speak as soon as it moves from the ‘micro’ to the ‘macro’.
Furthermore, if the Labour Party is to seriously confront the insecurity that people are facing then it has to be wholly committed to an adequate system of social security. This speech barely acknowledges that what makes many people feel insecure is the reality of a life of inadequate social security; a life living in fear of losing your job, not just the insecure and underpaid jobs themselves.
In policy terms there is much that’s encouraging; a regional industrial policy, new rules on takeovers and a commitment to building more homes. On the main part of the speech, banking, it includes useful policy which could bring us closer to a banking system that serves the rest of society and not just itself. In particular a British Investment Bank and a bolder Green Investment Bank would lead to more patient financing of the real economy.
Where the policy for a better banking system falls short is that it’s predicated on belief that 7 big banks instead of a 5 big banks will be a considerable improvement. What we need is more banks that aren’t just universal PLCs but customer owned banks and local banks. Surely the place to start with creating a genuine ‘challenger’ bank is with the publically owned RBS, this way we could create a bank with the characteristics that the public would like to see, not just the shareholders. Labour has started a vital conversation on banking reform, we now need to engage with it to ensure they offer a genuine alternative vision of banking.
For much more on what a good banking system would look like and how it could be created see Good Banking: Why we need a bigger public debate.