- Labour leader Jeremy Corbyn attacks the “destructive,” “pernicious and undemocratic” City of London in a speech.
- Corbyn wants a “fundamental rethink of whom finance should serve and how it should be regulated.”
- This is the second time in less than three months that Corbyn has aggressively attacked the UK’s financial sector, suggesting he is truly serious about taking it on.
LONDON – Labour leader Jeremy Corbyn reiterated his tough stance on the City of London on Tuesday, proving he is serious about pursuing a “serious rethink” of how the UK’s financial sector works.
Corbyn said in a speech to the annual conference of the manufacturers’ trade association, the EEF, that a Labour government “will make finance the servants of industry instead of the masters of us all.”
“We need a fundamental rethink of whom finance should serve and how it should be regulated,” he said, “There can be no rebalancing of our distorted, sluggish and unequal economy without taking on the power 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 productive economy, our public services and people’s lives being held hostage by a small number of too big to fail banks and casino financial institutions. The next Labour Government will be the first in 40 years to stand up for the real economy.”
‘Speculators and gamblers’
In delivering the anti-City speech, Corbyn backed up previous comments he has made about the financial services sector and made abundantly clear that the City is in for a big shock, if and when Labour comes to power.
Corbyn attacked banks and bankers in November last year, calling them “speculators and gamblers who crashed our economy… their greed plunged the world into crisis and we’re still paying the price.”
Singling out American lender Morgan Stanley – which had said that a Corbyn government could be a bigger negative for the UK economy than Brexit – Corbyn said: “Nurses, teachers, shop workers, builders, just about everyone is finding it harder to get by, while Morgan Stanley’s CEO paid himself £21.5 million last year and UK banks paid out £15 billion in bonuses.”
Corbyn’s attacks on the City of London make sense politically. Much of Corbyn’s base support comes from those who feel disenfranchised and think people like bankers are actively trying to screw the little guy.
Attacking the alleged vested interests of the banking sector is a perfect one-two punch that will enthuse and mobilise his core support, while also allowing him to play the victim when banks react.
The fact that Corbyn has strongly restated his anti-City position in a major speech suggests that even with the chance of power now looming large, he is not bluffing.
It was all well and good for Labour to make grand anti-establishment proclamations when Corbyn’s party was polling less than 30% and there was little chance of anything other than a Conservative government before 2021. When you’ve got no chance of gaining power it is much easier to promise to fundamental change.
But to do so when you’re polling level with the ruling party, and there is a very real chance you could be in power in the next year or so (many forecasters expect a new general election in 2018 or 2019) shows real commitment to the idea.
Whether or not Corbyn is actually able to achieve a genuine shift in the way the City operates is a different story. The financial services sector contributes the highest level of corporate taxes of any sector, with around £90 billion of tax going to the government every year.
It also has a powerful lobby and a vital role in the wider economy.
“As well as providing jobs and tax revenue, this industry helps people save for a mortgage, start a business, invest in new technologies or plan for retirement,” Miles Celic, one of the City’s most prominent lobbyists said on Tuesday.
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