The 2019 TUC Congress passed a proposal from the Fire Brigades Union for “public ownership of the big banks, which could play a central role in building a sustainable economy, investing in a publicly owned energy sector and creating decent, unionised jobs in the interests of working people”.
No one opposed the motion – but very few are actually advocating or campaigning for this. Here we quote a range of labour movement activists and representatives on why it is so essential. In the current situation, as we face an implosion of credit and a snowballing slump, against the background of the burgeoning climate crisis, the demand is more important than ever – both to protect ourselves immediately and for any serious move towards socialism.
Here we quote a range of labour movement activists and leaders on why they support this demand. Thanks to The Clarion from which much of the following was taken.
John McDonnell MP (2008, during the Labour government’s bank bail out)
We’re putting up £50bn of tax payers’ money. We’re getting preference shares with no votes so no controlling interest. We can’t even put people on their boards. The shares will be bought in those banks that really need it, and they’re the ones with the dodgiest debts. We’re nationalising the loss making banks, by the looks of it, in partial form. But in addition to that, what it will mean is for this deal we’ll have to increase our borrowing, which means putting up taxes, which means reducing public expenditure, reducing demand in the economy, which will deepen and lengthen the recession. My constituents will pay for this deal with their taxes, and in a recession with the loss of jobs and for some of them the loss of their homes.
We should have been more forthright. We should have nationalised to stabilise and then allow us to reform the banking system. We shouldn’t be nationalising with compensation. What we’re doing now may stabilise it, but it means we’ve got no controls over it again, and in two years they’ll be back into binge investments and bonuses and massive executive pay, because the conditions we’re attaching today are virtually unenforceable, because we have no controlling interests in these companies.
The tax-payers are going to pay for this deal and literally the bankers are laughing all the way to the bank.
This is like your next door neighbour having a binge party, buying a new car, going on holiday and then sending you the bill and expecting you to pick up the tab. That’s what the government is expecting the tax-payer to do, without any control over what will happen in the future.
• Full interview here.
Matt Wrack, Fire Brigades Union General Secretary (2012)
The Con-Dem coalition argues that further privatisation and deregulation is the route out of recession but it was the deregulated private finance sector that sparked the crisis. The government’s arguments need to be challenged. The banks cannot be allowed to carry on the way they’ve done before. We need a sharp break with the practices of the past.
The labour movement should place on the agenda the call for a publicly owned finance industry which would provide a public service to industry and working people.
Taking over the banks will enable the state to plan investment. Instead of investment bankers gambling with money in financial markets, funds could be switched to creating millions of sustainable jobs and investing in the housing, public services and infrastructure we need. The privately owned banking system created a huge credit bubble that burst and triggered the biggest economic slump in Britain for generations.
Regulation failed to stop banks collapsing and bringing down the economy. More regulation won’t work now. It’s expensive, bureaucratic and ineffective.
Some argue that the banks should be broken into smaller units so that competition can flourish and the monopoly of the big five can be broken. But the banks are too interconnected – if one goes down, they can all go down like a row of dominos.
In any case, the crisis did not start with the big banks. In Britain, it started with the smaller lenders like Northern Rock. More regulation or a break-up of the banks will not make them operate in the interests of the wider economy. Their main objective will still be to maximise profits for their shareholders and bonuses for their top executives. Private ownership means profit comes before everything else. New regulations can be bypassed. That will continue as long as banks are under private ownership.
The public has no control over the banks’ decision-making, even in banks that are majority state-owned. Only public ownership of the major banks with a new democratic structure of control can turn banking into a public service. A publicly owned banking system could finance a mass programme of useful public works, to create jobs and modernise infrastructure.
The resources are there. But they are in the hands of the billionaires, not in our hands. We need to ask ourselves what sort of society we want – one where spivs and gamblers decide what happens or where the majority decides?
We face a huge challenge. We must rise to the occasion and act decisively in the interests of our class.
• Full article here.
Nadia Whittome MP (2019)
We have a decade to radically restructure the international economy. It’s not enough to tweak around the edges or to limit ourselves to one country.
We need to take the banking and energy industries into public ownership, and build a decarbonised economy that creates secure, well-paid, unionised jobs in green industries and serves people not profit.
We need a radical Labour government: a government that taxes the rich to fund public services, expands common ownership, and abolishes all anti-union laws so workers are free to stand up for ourselves.
• Full speech here.
Charlotte Austin, Labour National Policy Forum rep (2017)
In the aftermath of the 2007 banking crisis, the Labour government carried out a nationalisation that cost in the area of a trillion pounds and yet failed to tackle the corruption and inequality that led to the crash.
Labour missed the opportunity of a generation – and we are still paying dearly.
The way in which the major banks were part-nationalised represents a very bad deal for everyone but the bank bosses. By insuring banks against their ‘toxic assets’, the Government took responsibility for the banks’ liabilities while leaving their profits untouched, sanctioning the reckless activity that almost brought the entire system to collapse.
The fact that Gordon Brown and his government invested so greatly in the opinions of the right-wing press is ironic because ultimately it was entirely blind to Labour’s actions during the crash and successfully pinned the blame for a world economic crisis on our party. When Labour failed to challenge the narrative that the banking crisis necessitated austerity measures rather than the increase in spending that the depressed economy vitally needed, it made the party so much more vulnerable to the accusation that Labour’s mismanagement caused the dire financial situation.
The consequences of Labour’s reluctance to reform the banking system are becoming ever more dangerous.
Nationalising the banks under democratic control is the right course of action to avoid future crises.
A public, democratically run banking sector would be able to act in the public interest in order to direct credit where the economy needs it most. It would be able to put jobs, business and services ahead of creating a casino economy. Nationalising the banking sector would give an enormous boost to Labour’s ability to develop an economy run in the interests of the many.
• Full article here.
Ben Selby, FBU Executive Council member (2020)
When we had the financial crisis in 2007-8 and we saw the likes of Northern Rock crash, the people impacted were the workers. Then workers got hit a second time with the austerity that paid for the bank bailout. How do we avoid workers being made to pay for this crisis and future ones? The question of the banks and who owns and controls them is still key.
Democracy is about bringing people closer to power, but what happened in 2008 and since shows that power is a million miles from workers. If we’re going to achieve socialism and real democracy, which are essential to one another, that has to include democratic control over this key section of the economy and therefore public ownership.
That will give us the resources and control to really improve people’s rights and conditions, really strengthen our public services, elevate the workers who have been on the frontline in this crisis, and get out of it in workers’ interests.
The other aspect is about climate change, and this is a point that applies internationally as well. Our response to the climate crisis would be much stronger if we had the power to make decisions about investing in the right things, in renewable energy and green jobs and infrastructure rather than fossil fuels and extreme energy.
The policy passed at last year’s TUC without dissent, but I suspect many see it as simply too hard to campaign on. Since then that’s reinforced because we have a Tory government and many feel it’s hard to win anything. However, now when we’re taking stock is exactly the time raise this demand and win support for it. We need to get the idea out there. We need to energise and radicalise discussion about policies. This in particular is a vital policy: we need to make labour movement support for it real and campaign in the Labour Party for them to take it up.
• Full interview here.
Maria Exall, Communication Workers’ Union and Labour Unions Vice-Chair (2020)
TUC Congress passed policy for public ownership of the banks, but the unions are not campaigning on it. Now is the time. We should totally reject the idea that banking and finance are somehow unnecessary – we can see that now with the problems about restarting the economy, about loans to small businesses and many other issues. The problem is they are run according to neo-liberal principles and policies, with zero public accountability. If we can integrate this case into a wider argument about reformulating the kind of economy we have it can win support. But to win the argument the labour movement needs to make it.
• Full interview here.
Owen Jones (2017)
According to a recent poll, half the electorate support nationalising the banks, despite almost no one arguing for such a policy in public life.
Sure, the rip-off inefficiency of rail privatisation, or the failure of the great energy sell-off, or the indefensible debacle of privately run water – all are testament to the intellectual poverty of the “private good, public bad” argument. None quite compete, however, with the matter of the banks leaving the entire western world consumed with the gravest series of crises since the second world war.
The principle architect of Labour’s recent manifesto, Andrew Fisher, called for the nationalisation of Britain’s banking sector in his 2014 book The Failed Experiment: And How to Build an Economy That Works. He was surely right then and he is right now. Labour is right to call for a German-style public investment bank, backed up by similar publicly run local banks.
But such proposals are not in themselves sufficient. Britain’s privately run banks have proved a disaster for everyone except their shareholders. The only good alternative is public stakeholder banks, run by workers, consumers and local authorities, with an obligation to defend the best interests of our communities. Privately owned banks have proved a catastrophic failure – for our economy, our social cohesion and our politics. There is surely no alternative to public ownership.
• Full article here.
Public meeting: escaping the crisis – why we need public ownership of finance
Organised by The Clarion
7pm, Friday 29 May (on Zoom)
• Ben Selby, FBU executive council member who moved the policy at TUC 2019
• Ruth Cashman, Labour for a Socialist Europe secretary
• Abel Harvie-Clark, climate striker and activist
• TUC Congress policy
• RMT conference policy (2018)
• Momentum policy (2021)
• Young Labour conference policy (2017)
• Policy submitted to Labour conference (2019) by the FBU and CLPs
• FBU pamphlet It's time to take over the banks (2012)
- Excerpts on tackling climate change
• Labour for a Socialist Europe policy (2019)
• Another Europe is Possible policy (2020)
• Debate at The World Transformed (2018), reported by economist Michael Roberts