Brexit Party and the Faragists know exactly what they're doing when it comes to propaganda. Make as many false-promises to as many people as possible in the hope that they're dumb enough to believe that they'll actually follow through on any of it.
Their position on British Steel is absolutely extraordinary. They've proposed a John Lewis style workers' partnership to save the institution from insolvency, but they also propose reducing UK tariffs on almost all imports to zero, meaning the UK would be absolutely flooded with cheap imports, meaning the inevitable ruination of the British Steel industry, workers' partnership or not.
But besides the fact that their stated aims are mutually contradictory nonsense, it gets even worse. The candidate they're standing in the Peterborough by-election is a guy called Mike Greene who works for a private investment fund called Greybull Capital LLP.
These are the owners who have driven British Steel into insolvency, which is just one of the numerous company collapses they've overseen in recent years.
They were behind the collapse of Monarch Airlines that collapsed owing £500 million to suppliers and creditors, and leaving 110,000 stranded tourists across Europe who needed repatriating at a cost of £60 million to the British taxpayer.
Then there was the subsequent collapse of the spun-off Monarch Aircraft Engineering the following year with the loss of 408 jobs.
Snooker and pool fans will remember the collapse of Rileys in 2012, which was then acquired by Greybull who then flogged off half the chain's sites before ditching the lot in 2014. Rileys was destroyed, but Greybull made a 10% profit on their dealings so hooray for them eh?
They were involved in the Comet buyout before the electrical retailer collapsed into insolvency in 2013 triggering the loss of 7,000 jobs. This bankruptcy resulted in a £25 million loss to the public purse in unpaid VAT.
Then there was the collapse of My Local in 2016 with the loss of 1,200 jobs, with Greene intimately involved in that particular Greybull insolvency.
And now in 2019 we've got Greybull driving British Steel into administration too, with 5,000 jobs at risk, and another 2,000 through supply chains.
And Brexit Party are gleefully fielding one of Greybull's senior figures as their parliamentary candidate in the Peterborough by-election.
And herein lies the great deceit of the Faragists.
They appeal to people's patriotism and pretend that it's the prideful British thing to do to vote for the most militant form of Brexit possible, but then their first candidate ever for parliament is a guy who works for a faceless vulture fund that's driven loads of British businesses into insolvency, destroyed literally thousands of British jobs, and left the UK taxpayer footing the bill time and time again.
They're not pushing a "no deal" Brexit because they think it'll be good for Britain, they're pushing it because they know that they can make vast amounts of money by betting against Britain, the Pound, and British companies as they push the UK economy over an avoidable cliff.
Then they can make even more by flooding their ill-gotten gains back into the UK to buy up £billions in distressed British assets on the cheap in the resulting chaos.
They want to do to Britain what Mike and his Greybull mates have been doing to British companies like Monarch, Rileys, My Local, Comet, and British Steel.
"No deal" Brexit is a deeply unpatriotic national asset stripping strategy being sold to the gullible as the patriotic thing to support, but the fact that the Brexit Party's first ever parliamentary candidate is a key player in the Greybull asset-stripping operation tells you all you need to know.
But then the bookies have Greene and Brexit Party as favourites to win in Peterborough, so none of the opposition parties are being clear enough in highlighting this guy's insolvency-strewn CV.
Another Angry Voice is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.
Today a Tory MP publicly accused the boss of a major UK employer of lying. The accusation was made by Bernard Jenkin who responded to the fears of Jaguar Land Rover that a "no deal" Brexit would be catastrophic for their company and their workforce by saying "I think he's making it up".
Now just imagine for a moment that a Labour Party MP had openly accused the boss of a major British employer of lying to the public.
The mainstream media would obviously be absolutely teaming with "Labour are the anti-business party" takes, at least for the rest of the day, and with the incident referenced over and again for months as evidence of Labour's anti-business agenda.
But because the badmouthing of British business is coming from a Tory MP, it's barely elicited a whisper of condemnation from mainstream media hacks, other than a few Tweets from half-decent journalists like Gavin Esler and Norman Smith.
Sustained media partisanship
Alarmingly this isn't the only example of highly partisan editorial decisions to avoid vehement condemnation of the Tories. Last week the majority of Tory MPs joined all the fascist parties in the European Parliament to vote in support of Viktor Orbán's anti-Semetic, judiciary-rigging, free speech-attacking, human rights-trashing regime in Hungary.
Again, just imagine the deafening howls of condemnation had it been Labour MEPs defying the European consensus to vote in favour of the most notorious anti-Semite in Europe, but somehow the Tories get a free pass.
Labour are now the party of business!
If you believed all the mainstream media rhetoric about Labour being rabid extreme-left fanatics under Jeremy Corbyn, the idea that they've taken over as the obvious pro-business party would seem insane, but the reality is very different from what orthodox neoliberals in the mainstream media are trying to make you think.
Admittedly Jeremy Corbyn has said that corporations would have to pay their fair share in tax (especially if they want to bid for government contracts) and that the Corporation Tax rate is going to have to rise so that it's back in line with the G7 average, which wouldn't go down all that well with Britain's most avid tax-dodgers and corporate profiteers.
However, most business leaders should be able to see the sense in many of Corbyn's strategies, and that the economic responsibility of paying their fair share in tax comes with significant payoffs too.
Making sure that major corporations pay their fair share in tax would create a much fairer playing field for hundreds of thousands of small and medium sized businesses that can't afford to pay expensive tax lawyers to hide their profits in tax havens.
Corbyn has clearly listened to British businesses (large and small) and to trade unions and he's made it clear that Labour would seek to retain access to the Customs Union and Single Market, while the Tories keep on threatening the ruination of a "no deal" Brexit and smearing prominent business leaders who express their concerns about this reckless game of ideological brinkmansip as liars!
Labour's policies of investing in Britain's creaking public infrastructure and building hundreds of thousands of affordable homes would clearly create huge opportunities for construction companies, engineering firms, and myriad suppliers.
Labour's "Build it in Britain" industrial policy certainly must make a lot of sense to British-based manufacturers.
And Labour's policy of introducing a National Education Service to provide free education and training to all, would clearly help to ensure that the UK has the kind of flexible and highly-skilled workforce that is needed in order to reverse the Tory productivity crisis and make Britain a high-tech economy fit for the 21st Century.
Whether you support Jeremy Corbyn's investment-based economic strategy or not, you certainly won't be hearing any Labour MPs saying "fuck business" like Boris Johnson, or smearing prominent British business leaders as liars like Bernard Jenkin just did.
You can read more about Labour's industrial strategy here.
Another Angry Voice is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.
When the Tories were introducing their ideologically driven and hopelessly botched plan to privatise the UK rail network the Tory Transport Secretary John MacGregor claimed that passengers would benefit from reduced fares.
Anyone who understood the basics of monopolies (captive markets) knew that MacGregor's promises were fantastical nonsense. Once a monopoly service is handed to a private profit-seeking entity, prices are certain to rise because there's no price competition in a captive market.
Two decades after rail privatisation the average train fare has increased by 117% (24% adjusted for inflation). On some journeys fares have increased by well over 200%.
Aside from the direct hit to passengers' wallets, there's also the fact that the private rail operators are being showered with £billions in direct and indirect taxpayer subsidies.
Annual direct subsidies to the private rail franchises far exceed the total cost of running the entire UK rail network back when it was run as a not-for-profit public service!
Aside from the direct subsidies there is also the issue of the indirect subsidy that occurs because the publicly owned rail infrastructure company (Network Rail) allows the private rail franchises to use the tracks at significantly below the actual cost of maintaining them.
Hiring out the tracks at way below market value in order to secure the profitability of the private train operators has meant that Network Rail has built up a vast debt mountain of £41 billion.
This is about as clear an example as possible of the Tory ideology of privatising the profits and nationalising the debts as it's possible to see.
Aside from costing far more in direct and indirect subsidies, the privatised rail franchises do far less than British Rail with all of that extra money.
Before privatisation British Rail designed and developed new trains, including many that are still in service today generating huge profits for their private operators. Privatisation of the UK rail network put a swift end to Britain being a world-leader in train building.
Immediately after privatisation the private franchises were so intent on reaping as much profit as possible out of the old taxpayer-funded rolling stock that there wasn't a single new train order for 1,064 days, causing the absolute annihilation of the UK train building industry.
These days the UK buys most of its new trains from Germany, Japan, China and even Italy, which is an absolutely shameful state of affairs for the country that invented the railway and was a world leader in trainbuilding well into the 1980s.
The abject failure of rail privatisation is perhaps the most glaring example of all amongst a litany of other woeful Tory privatisation scams, yet the Tories will never undo their mistake because they're ideologically opposed to British infrastructure being owned by the British public and operated on their behalf.
In fact the Tories have such a strong ideological opposition to British infrastructure and services being owned by the British people that they would demonstrably prefer our rail infrastructure to be owned and operated by foreign states like Germany, France, Netherlands, Hong Kong and Singapore.
Just a few decades ago a government would be considered shockingly treasonous for promoting a policy of prohibiting the British from owning our own rail network so that it can be used as a cash cow by foreign states.
But these days, thanks to the Tory rail privatisation scam, it's not just a crackpot policy that would have been shouted down as anti-British lunacy in the past, it's the actual reality!
Tory rail privatisation has been an absolute failure for everyone apart from the profiteering rail franchises and train leasing companies. Passengers have suffered massive ticket price inflation and ever more over-crowded and unsafe conditions; the taxpayer continues to pay far more in subsidies than the total cost of running British Rail in the past; Network Rail is sitting on a £41 billion debt mountain; the UK train building industry has been annihilated; and railway staff have suffered over two decades of declining wages and worsening working conditions.
The two political parties that deserve credit for promoting the extremely popular policy of rail renationalisation are Jeremy Corbyn's Labour Party and the Green Party (who supported rail renationalisation back when the New Labour mob were still pushing disgusting neoliberalism-lite gruel on the public under Miliband and Balls).
Let's hope that someone with some sense actually moves to sort out this festering Tory blight on our nation soon.
Another Angry Voice is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.
A spectacularly misleading article in the Independent by the little-known hack Benjamin Kentish has gone super-viral on Twitter after it's been picked up by the anti-Corbyn mob (a combination of marginalised pro-neoliberal Labour right-wingers, Tory concern trolls, and extreme Remainers who are just as prepared to lie and deceive to achieve their agenda as the Brextremists are).
In this article I'm going to go through some of the stuff Jeremy Corbyn actually said in his speech, and expose the cynical selective quotation and manufactured outrage tactics that helped this shocking piece of "journalism" to go mega-viral.
Selective quotations
The Independent article about Jeremy Corbyn's speech to the EFF (the British manufacturing industry) manages to squeeze two selective quotations from the speech into the title alone.
This selective quotation tactic has really got the anti-Corbyn mob and the Remain extremists frothing at the mouth.
When Jeremy Corbyn actually spoke about the "benefit" of Brexit, he was actually making the point that the Tory government had squandered the "one benefit" of Brexit, which is the way the devaluation of the pound should have made British exports more competitive.
Here is the relevant section:
"Our exporters should be able to take proper advantage of the one benefit to them that Brexit has already brought – a more competitive pound.
After the EU referendum result the pound became more competitive and that should have helped our exporters.
But they are being sold out by a lack of a Conservative Government industrial plan which has left our economy far too reliant on imports."
Omission of this vital bit of context can only have been deliberate.
The next selective quotation is even worse. When the article quotes Corbyn talking about "cheap labour from abroad" the objective is clearly to get people furious that he's seemingly attacking immigration and the free movement of labour within the EU, but what he was actually talking about was the problem with globalisation and the offshoring of production to sweatshops in places with extremely low wages, poor workers' rights, and weak environmental standards.
Here's the relevant section of the speech in full:
"For too many of our people today the spread of insecure work, low pay and zero hours or temporary contracts is causing stress, debt and despondency.
It could not be clearer that change is needed, we must aim for something better.
Our new economic approach is necessary because for the last forty years a kind of magical thinking has dominated the way Britain is run.
We’ve been told that it’s good, even advanced, for our country to manufacture less and less and to rely instead on cheap labour abroad to produce imports while we focus on the City of London and the financial sector.
While many economics professionals, politicians and City types insisted this was all a strength the banking crash confirmed it was in fact a profound weakness.
A lack of support for manufacturing is sucking the dynamism out of our economy, pay from the pockets of our workers and any hope of secure well-paid jobs from a generation of our young people.
This is why Labour is committed to turning things around."
It's also worth noting that as well as the "to produce imports" part having disappeared, the word "from" has mysteriously appeared too.
In the body of the article the selective quotation tactic is continued with another use of the brazenly traduced "cheap labour from abroad" quote to imply that Corbyn is attacking immigration and the free movement of Labour rather than critiquing the offshoring of manufacturing and production.
Given that the selective and inaccurate quotation tactic was used both in the body and the title of the article, there can be little doubt that the idea was to manufacture as much outrage as possible. And the sheer number of outrage shares on Twitter just goes to show that this kind of cynical and dishonest manipulation works a treat.
Trump
The article works incredibly hard to create the impression that Jeremy Corbyn is imitating Donald Trump's "America First" rhetoric, rather than expressing his concerns about globalisation, privatisation, and offshoring that have remained consistent for decades.
This attempt to enrage the reader by casting Corbyn's speech as some kind of Trump-style posturing is particularly misleading because the speech actually criticises Donald Trump three times!
Here are all of the mentions of Donald trump in the speech:
"No amount of desperate attempts to cosy up to President Trump would compensate for the damage done by getting this [Brexit] wrong. Now is the time to put people’s jobs and living standards first."
"It must be said however that wanting to build it in Britain is not turning away from the world, nor some return to protectionism or Trump-style trade wars."
"A botched Tory Brexit will sell our manufacturers short with the fantasy of a free trading buccaneering future which in reality would be a nightmare of our public services sold to multinational companies and our country in hock to Donald Trump whilst we all eat chlorinated chicken."
It takes some incredible amount of chutzpah to cast a speech as Trumpian when the content is highly critical of Donald Trump, but that's exactly what's been done, and exactly what a massive number of delusional right-wing "centrists" and easily-led Remainers have fallen for.
The rest of the speech
The hatchet job article worked incredibly hard to whip up fury over a few selective quotations and a desperately misleading effort to portray it as Trumpian rhetoric, but in doing so it neglected to even mention other aspects of the speech.
Procurement
"If [Theresa May] is so serious about taking back control why has her Government offshored the production of our new British passports to France?
Workers in Gateshead were making them and that work has been taken away from that community.
Unsurprisingly the French aren’t queuing up to have their French passports made in Britain.
We have plenty of capacity to build train carriages in the UK and yet repeatedly over recent years these contracts have been farmed out abroad, costing our economy crucial investment, jobs for workers and tax revenues.
Carrying on like this is simply not sustainable."
Critiquing Tory anti-EU rhetoric
"Too often, we have been told by Conservatives who are ideologically opposed to supporting our industries that EU rules prevent us from supporting our own economy.
But if you go to Germany you’ll struggle to find a train that wasn’t built there, even though they’re currently governed by the same rules as us.
When the steel crisis hit in 2016 Italy, Germany and France all intervened legally under existing state aid rules but our government sat back and did nothing."
Regional development
"The next Labour government will rebalance our economy so that there is prosperity in every region and nation.
We will do this by setting up a national investment bank and a network of regional development banks to provide capital to the productive, real economy that secures good skilled jobs."
Housing
"We will focus relentlessly on ending the housing crisis caused by the Conservatives and their uncompromising commitment to the free market.
We will build homes for the many not investment opportunities for the few and with them will come a new generation of zero carbon homes, creating new training opportunities and skilled jobs."
Solar industry
"Once innovators [in solar development], we are now falling back as the industry takes off across Europe. And why?
British solar firms were hit by cuts to subsidies in 2015 and 2016 and changes to business rates for buildings with rooftop panels.
Why did the Tory government do this? To save a few pounds in the short term, yet it has cost us jobs and innovation.
As a result between now and 2022 France is forecast to add five times as much solar capacity as the UK, Germany ten times."
Outsourcing
"When there are billions of pounds of public money and thousands of skilled jobs at stake we cannot just focus on saving a quick buck when awarding these contracts.
It is a totally false economy.
Instead by considering public interest such as job creation and the supply chains, we can grow our economy in a way that works for everybody.
Just today a cross-party committee of MPs has said that the stated reasons for contracting out services to save taxpayers money and to encourage innovation in delivery are too often simply not being met.
In the words of the Public Accounts Committee 'there has emerged a small group of large companies which are expert at winning contracts but do not always deliver a good service'."
Customs Union
"BMW, Airbus, and companies after company has warned of the real and damaging effects of Conservative customs chaos.
Theresa May and her warring cabinet should think again, even at this late stage and reconsider the option of negotiating a brand new customs union.
This decision needn’t be a matter of ideology, or divisions in the Tory Party. It’s a matter of practical common sense.
It’s not often that the Labour Party and the Institute of Directors, the CBI and the TUC agree, we need to negotiate a new customs union. What will help our manufacturing industries?
The companies themselves are giving us a clear answer. The government should listen to it.
But the Prime Minister seems more willing to listen to Jacob Rees-Mogg and Boris Johnson.
Never before has a Prime Minister discarded the interests of the country so recklessly in favour of the interests of their own party or their own self-preservation."
A new deal for British businesses
"The very richest companies must pay a bit more tax and pay their workers better and in return we will train our people to have the skills our economy needs, upgrade our creaking infrastructure and provide the planning and support to help industry compete on the world stage.
And those companies that we do business with as the government will have to be at the forefront of best practice to create social as well as economic value.
Firms our government does business with will have to: properly pay their taxes, respect workers rights, provide equal opportunities, protect the environment, train their workers, pay their suppliers on time and end boardroom excess by moving to a 20-1 limit on the gap between the lowest and highest paid.
That is the deal that we want to make with businesses, it’s one that will benefit our whole economy."
Propaganda
The sheer amount of detail that was left out in order to traduce and distort Corbyn's speech into looking like a trumpian extreme-Brexit anti-immigrant rant is extraordinary.
If the so-called journalist had any integrity at all he would surely have focused on the fact Labour are committed to securing a customs deal with the EU (a very significant difference from the Tory approach), and would have at least bothered to mention the bold "new deal" that Corbyn offered to Britain's business leaders.
But no, Jeremy Corbyn's bold "new deal" offer to British business leaders that formed the actual conclusion to the speech wasn't even mentioned once!
The truly sad thing is that it's highly likely that vastly more people will end up believing the warped version of events described in this shockingly deceptive hatchet job, than those who will actually encounter a more honest account of what was actually said.
What you can do:
- You could share this AAV article on social media to provide a more honest interpretation of what Jeremy Corbyn said.
- You could share the full transcript of the speech (here)
- You could add your comments on the Independent article to point out what a deceptive hatchet job it is, or correct people on social media who are using this desperate piece of propaganda to launch their own deceptive anti-Corbyn rants.
Another Angry Voice is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.
On Tuesday February 20th 2018 Jeremy Corbyn gave a speech to the EFF confederation of British manufacturers about Labour's economic strategy. The response of the Evening Standard (edited by former Tory Chancellor George Osborne) was to publish a front page hatchet job describing the speech as a "red rag" to the City of London, and Jeremy Corbyn's economic strategy as a plot to turn London into "the last Soviet era city west of Pyongyang".
Shockingly hundreds of thousands of Evening Standard readers will have uncritically accepted this ludicrously hyperbolic appraisal of Jeremy Corbyn's speech without even referring to the source material and judging it for themselves.
So here's the speech so that you can judge for yourself whether George Osborne's minions at the Evening Standard were justified in claiming that Corbyn's speech is some kind of proof of his intention to turn Britain into a Soviet style state where private industry is banned, or the outline of a sensible economic strategy to undo the damage and reduce the private debt mountains caused by four decades of hard-right economic dogma:
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Industrial revolution
Britain was the birthplace of the industrial revolution and many great inventions from the cash point to the jet engine. Manufacturing continues to punch way above its weight accounting for 10% of output, but 44% of exports and a massive 70% of business investment in research and development.
Output per hour is £4 higher in manufacturing than the average for all sectors and the average annual earnings of someone working in manufacturing are nearly £4000 higher than average earnings from across the whole economy.
I know from my childhood the value of manufacturing jobs. My dad had one, as an electrical engineer who worked successively for Westinghouse, English Electric and GC. He enjoyed good, satisfying work with decent pay. The contributions of manufacturing of all of you to our economy cannot be understated, and the case for supporting more manufacturing jobs and industries is undeniable. And yet for too long Government hasn’t done enough to support you.
Lagging behind
Businesses are crying out for infrastructure investment. We are lagging behind other leading countries, but the Government simply isn’t delivering. That’s why we have pledged to create a National Transformation Fund to upgrade our transport, energy and digital infrastructure so that it is worthy of the 21st Century.
We must also invest in our people as well as our physical infrastructure. We have, on the one hand, university graduates who can’t find a suitable job while thousands of underemployed workers can’t get the skills they need to advance. And on the other hand, businesses are struggling to recruit workers with the right skills.
Time and again, businesses tell me how difficult it is to hire employees with the skills they need. And that far too often school leavers are unprepared for the workplace. Life-long learning Labour’s National Education Service will tackle that problem head-on, providing free, life-long learning to all, so that anyone can retrain or upskill at any point in their life.
We will put vocational education, too often the poor relation of our education system, at the heart of the National Education Service ensuring that science and technical learning starts early in primary schools.
Children should engage in practical learning from a young age not just in the classroom, but through play and activities.
And we will build links with industry into the National Education Service, to make sure that our education system keeps pace with the changing needs of our economy, expanding the type of training that qualifies under the Apprenticeship Levy so that businesses can actually use it for the skills they need.
The Tories’ approach to Brexit is threatening to turn our skills crisis into a catastrophe, especially for manufacturers who rely on recruiting skilled workers from overseas.
Labour said from the start; we would give an unconditional guarantee to EU citizens of their right to stay in the UK. Not just now but during the transition period as well.
This is not just because of the valuable role EU citizens play in our economy and in many of your businesses, but because they are people who have built a life here.
Unlike the Tories, we will not use people, mothers, fathers, neighbours, friends as bargaining chips.
Brexit position
Brexit is for many an emotive subject. But for business, it is first and foremost a practical matter.
To make decisions about where, when, perhaps even whether to invest, you need to know what markets you will have access to, what regulations and product standards you will be subject to, who you will be able to recruit, what will happen to our supply chains, which we all know are currently integrated across many national borders. That’s why Labour has from the start taken the practical position of accepting the result of the referendum and insisting the economy must come first.
We are leaving the EU, but our businesses must not withdraw from European markets. Business needs clarity and with four out of six of the Government’s “Road to Brexit” speeches already delivered, the Tories approach to Brexit is if anything less clear.
It’s time for the Cabinet to stop fighting and the Government to say where it wants to take the country.
And it’s not just in its approach to Brexit that the Government is failing to put the economy first. For too long manufacturing has been undervalued.
Those who make things
For all their warm words, whether Osborne’s “March of the Makers” or this government’s new-found enthusiasm for the words ‘industrial strategy’ for decades now, the Conservatives have created, encouraged and sustained a system that rewards those who lend and speculate over those who make things.
Thatcher’s progressive abolition of restrictions on financial trading culminating in the ‘Big Bang’ deregulation of 1986 placed the needs of speculative finance at the helm of British economic life.
When Thatcher took office the ratio of private debt to GDP was 60%. In the 30 years that followed, that trebled.
That increase wasn’t due to banks supporting a healthy and productive economy by lending to businesses represented here today. It was because banks started lending to households and inflating asset prices on a scale never seen before. At the same time, investment banks began trading new kinds of financial products, packaging up debt in increasingly opaque ways and becoming ever more removed from the real economy.
Now let me be clear, finance has a central and essential role to play in a functioning economy.
Oiling the wheels
Without access to finance, how would the entrepreneur or business person just starting out find the means to get their idea off the ground?
How would a growing company afford new equipment that will make their business more productive and more profitable? Or expand their activities by opening new premises?
Finance is the grease that oils the wheels of our economy, and without it, economic activity would seize up.
But when private debt is twice the size of the real economy, when traders no longer understand the products they are trading and banks are funding speculation, rather than productive investment, something has gone grossly wrong.
Banks should be helping the real economy not suffocating it. Let me remind you of the words of John Maynard Keynes when he said: “There cannot be a real recovery . . . until the ideas of lenders and the ideas of productive borrowers are brought together again . . . . Seldom in modern history has the gap between the two been so wide and so difficult to bridge’.
“ Keynes was writing about the Great Depression of the 1930s but the gulf between finance and the real economy may be even wider today.
Money flows away
We know the results, money flows away from the productive activities that you are engaged in that create jobs and exports to instead inflate asset prices, concentrating money in the hands of a few owners, not producers, while households become more reliant on borrowing.
And we end up with an economy with more risk, more volatility and more instability.
It was a “heads I win, tails you lose” gamble for the banks, not my words, but those of the Governor of the Bank of England. And we’re all still paying for the inevitable crash.
When the last Labour Government stepped in to shore up our major banks as they stood on the brink of collapse it prevented a total meltdown. But the public should have been given a say in how the banks, propped up by our money were being run.
And there should’ve been a much more concerted effort to rein in banks’ speculation to refocus on productive lending.
We need a fundamental rethink of whom finance should serve and how it should be regulated.
Sluggish economy
There can be no rebalancing of our distorted, sluggish and unequal economy without taking on the unfettered power of finance.
For forty years, deregulated finance has progressively become more powerful. Its dominance over industry, obvious and destructive; its control of politics, pernicious and undemocratic.
The size and power of finance created a generation of politicians who thought the City of London could power the whole economy.
Out of control financial wizardry and gambling were left barely regulated, while the real economies in once strong industrial areas were put into managed decline.
The welfare state was left to pick up the slack with sticking plaster redistribution to the people and places held back by the finance-led boom of predominantly the South East of England.
For a generation instead of finance serving industry, politicians have served finance.
We’ve seen where that ends, the productive economy, our public services and people’s lives being held hostage by a small number of too big to fail banks and financial institutions.
No more.
The real economy
The next Labour Government will be the first in 40 years to stand up for the real economy. We will take decisive action to make finance the servant of industry not the masters of all.
The reign of finance doesn’t stop at the gates of the City of London. Its extractive logic has spread into all areas of life with short-term performance and narrow shareholder value prioritised over long-run growth and wider economic benefit.
Take GKN, one of the world’s oldest and most prestigious engineering firms with a big factory in Telford where I grew up. It employs 6,000 workers across the UK, contributes an estimated £1.3 billion to the economy, paid a healthy £174 million in tax each year and invested £561 million in Research and Development in the UK alone.
And yet GKN is currently facing a hostile, allegedly debt-fuelled takeover bid by Melrose, a company with a history of opportunistic asset-stripping.
A quick buck
It’s an all too familiar story like when Kraft took over Cadburys. A valuable company could be sacrificed so that a few can make a quick buck.
We rightly praise the growth of companies like GKN and their location in the UK. And yet when we are faced with the possible destruction of that company, the Government refuses to act.
That’s why the next Labour government will broaden the scope of the ‘public interest test’ to include explicit consideration of the needs of our economy taking advantage of new freedoms outside of the EU to allow Government to intervene to protect our industrial base.
An important step towards reprogramming the economy, so that it works for the many, not the few.
Reprogramming our economy; to reward good business practices, reining in speculative finance so that it serves – not distorts the whole UK economy – backed up by a strong industrial strategy, as well as investing in our physical infrastructure and our people. This approach is vital if we are to develop our manufacturing strength. That is what the next Labour Government is committed to working with you to achieve.
Thank you very much.
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Anyone with a grain of sense should be able to see that Corbyn isn't outlining a plan to abolish private industry or the financial sector, he's just calling for a better, fairer system that is geared more towards those who make things than those who recklessly gamble with other people's money.
He's not saying there's no place for speculative finance, but that finance should be used to fund new businesses, new infrastructure, and better services, rather than for unregulated gambling on extraordinarily complex derivatives that even most of the traders don't even understand.
You could see why city traders who have enjoyed four decades of enriching themselves at the expense of the real economy would object to any effort to get them to invest in the real productive economy rather than gambling away with impunity, knowing that they'll be bailed out by the taxpayer again whenever they next fail.
But Corbyn's speech should be music to the ears of anyone who values the real economy above the selfish interests of a tiny clique of city speculators who see it as their right to live off the backs of the rest of us, and have us pay for their economic crises through austerity dogma while the government actually lavishes handouts on them.
And even if you think that the interests of city speculators should trump the needs of the real economy, you'd have to be absolutely clueless to accept the idea that a call for more financial investment in private sector manufacturing is some kind of Soviet style communist plot.
Sadly though, there are actually people thick enough to accept such brazen Tory propaganda at face value, hence eight years of ruinous Tory austerity dogma damaging the future economic potential of the UK, rather than anything even remotely resembling an actual plan to make sure the financial sector insolvency crisis can never happen again.
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