A PM held to ransom

David Cameron returned from the European Summit last week announcing that he had vetoed a new treaty in the ‘national interest’. It would be more accurate to say he was ‘held to ransom’ by the Conservative Party’s friends in the City.

Cameron’s Conservatives are a new breed of Tory. It would be wrong to say that, like the resurgent Wispa bars, they are the same 80’s product in a shiny new wrapper. Nearly 150 Tory MPs are ‘newbies’ who took their seats in 2010. Fewer of them attended private school then in years past- 54% today compared with 70% in 1983. The party is a different shade of blue from Thatcher’s time.

One thing that has not changed is the party’s vested interest in protecting the perceived generators of national wealth. The Smith Institute reports that 27% of the current Conservative crop have a history in financial services. According to Aditya Chakrabortty of The Guardian, the financial sector in this country employs about 1 million people. This means that an industry that employs less than one-thirtieth of the working population is represented by one-quarter of MPs in the dominant governing party.

The Conservatives and the financial sector are entwined in other ways too. A report by GMB reveals that nearly 60% of donations to the Tory party come from individuals and companies linked to finance, hedge funds and other City interests. The Square Mile has often been touted as the beating heart of London. In many ways, it’s the beating heart of the Conservative party too.

In light of such figures, it should come as no surprise that a Conservative Prime Minister should fight tooth and nail in the most prestigious of arenas to protect City interests. Cameron’s so-called ‘veto’ was not a free decision made by a plucky little Englander taking on would-be tyrants overseas, it was the ransom he was forced to pay in return for the continued sponsorship of the financial wizards of the City. On Newsnight, the Minister for Europe effectively conceded this point when he argued that: “There was a real risk that without the safeguards [Cameron] wanted…you would over time have a read across from the closer fiscal integration that the Eurozone countries want to do towards measures that would influence financial services in particular.” The ‘national interest’ was revealed by the bumbling Minister to be code for ‘financial services’.

Is it right that the diplomatic strategy of the British government should be dictated by a closeted club of multi-millionaires detached from the everyday experiences of the vast majority of Britons? Once again the formidable array of interests that profit or benefit from the mysterious operations of finance capital have shifted into gear in spirited defence of the sector. Financial services provide billions in corporation tax. Financial services are one of very few sectors that Britain can boast of being a world leader in. Financial services have a noble heritage reaching back to the dawn of empire, and deserve their vaunted position at the apex of our commercial society.

These are all true statements. What is interesting is that very similar things were said of the coalmining industry in this country thirty years ago, of shipbuilding, and of manufacturing. Other things were true of these industries. They were inefficient, could no longer compete with other nations, and required huge public subsidies just to keep going.

Curiously, the same could be said of the financial sector today. It is no longer efficiently allocating credit to those businesses that need it. It is losing ground to American and European competitors, a process that will only speed up as Britain is left out in the cold while closer fiscal consolidation of the Eurozone takes place. It has required £289 billion of direct financing by the taxpayer since 2008 just to stay afloat, far more that the £193 billion it pumped into the treasury in corporation tax between 2002-2008.

This is the final damning reason why Cameron’s Conservatives are a kind apart from Thatcher’s. Her government identified failing industries, stripped them of their workforce and let them loose to explore the seemingly endless opportunities promised by the ‘knowledge economy.’ Cameron’s government is being held hostage by a failing industry that continues to suck up the resources of the British state and dictate policy terms to a country that no longer sees it as a source of any worth.

Louie Woodall is a member of the Young Fabians and Assistant Editor of the Young Fabians Blog

Future of Finance Network: From Inception to Action

The last few weeks have been exciting ones for the Future of Finance Network – not only in part due to the election outcome, but also as the Network continues to grow and plan its first events.

There have been a number of discussions on the Network’s forum surrounding the prospects of truly progressive politics in the new coalition government and the social implications of the proposed spending cuts, and the Network’s Steering group has been active in pursuing a number of strategic partnerships and attracting sponsorship for events. The most prominent of these partnerships is with the Labour Finance and Industry Group (LFIG) who are keen to work together on events and promote the aims and influence of both organisations.

Working with the LFIG we will be hosting an Emergency Budget roundtable discussion with the Labour Shadow Treasury Minister immediately after the Budget statement by the Government around the 22nd June. This is intended to be a high level ideologically-friendly briefing on the financial and business implications of the Budget from Network members and LFIG members.

Another upcoming event to look out for is the first of our “Progressive Finance” events that will be held in the middle of July. These events will be an opportunity to look at some of the current and social issues facing the finance industry in an informal setting. Our first will focus on addressing the cultural issues that women face in the City. The event will consist of two speakers on their unique experience of the industry, a Q&A session, and an opportunity to network with like minded people in industry. We are currently in the process of confirming speakers. Despite focus on women, the event is intended to be inclusive and to stimulate the debate needed to tackle some of the wider and persistent cultural issues affect the world of finance and business.

Check out the Network’s website for future discussion posts and updates on our upcoming events. In addition, if you missed the launch, there are a number of video blogs posted to give you a flavour for the topic of debate and what members of the Network think is the “Future of Finance”.

Can internet networks change politics?

The eagle eyed among you will notice that I have carefully doctored the question that’s on everyone’s mind – or at least those minds that have been exposed to the latest edition of the marvelous Young Fabians member mag, Anticipations – ‘Can the internet change politics?’. Selfishly shifting the goalposts to suit my own area of responsibility, I want to dig a little deeper about the potential for the power of networks…

Can they change politics? “Yes, but”. Yes, the power of online networks can be enormous… But, only if members of the network foster their own dynamism in their own online space.

As strategic planning would have it, the Young Fabian team have skillfully dovetailed the publication of the Antics ‘new media’ special with the launch of our very own new media offering – two dedicated Young Fabian online networks, hosted on Ning.net.

‘The Future of Finance’ network (http://youngfabians-networks-fof.ning.com), for progressives interested in the role of finance and society; and ‘The Technology and Society’ network (http://youngfabians-networks-tsociety.ning.com), to help bridge the gap between technology, science, engineering and progressive politics.

We will be formally launching the two Networks before the election. Our intention is for both networks to provide a vibrant forum for people to write, blog, discuss, create and lead innovative progressive projects on the issues that they find interesting.

Networks are open to Fabians and non-Fabians and aim to enable as much sharing of insights and collaboration as possible; focused on one particular issue or sector. New media is about empowerment and that is exactly what the Networks seek to do in a constructive and influential manner. Both finance and technology are topics where the Left has historically been weak and where the networks could contribute a huge amount to progressive thinking.

Providing an opportunity for empowerment for Young Fabian members and progressives is only half the story. Creating a dynamic and compelling online environment will require something extra… you. So, if you like the sound of what you’re reading, follow the links to find out more and get involved – join the networks and contribute something. I look forward to seeing what you have to say.

Nick Maxwell
Networks and Schools Officer.