The Economy

Part of Opposition Day — [8th Allotted Day] – in the House of Commons at 4:23 pm on 18th March 2009.

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Photo of Michael Meacher Michael Meacher Labour, Oldham West and Royton 4:23 pm, 18th March 2009

I must finish; I cannot take any more interventions.

It has been estimated—no one knows for certain about this; it is only an estimate, but it is from a reputable financial authority—that the public accounts may well reach a deficit of £175 billion to £200 billion by the end of the next financial year. That is an astronomical figure, and recovering from such a deficit could take several years. That is one powerful reason for not going down the route of the toxic assets protection scheme and these repeated capitalisations. But I continue to think that the overriding argument for the public ownership alternative is that rapidly restoring normal levels of lending—I do not believe that there is any other way of doing that—within the economy would largely prevent the enormous cost of rising bankruptcies and joblessness, which we are told could rise to 3.5 million, which we are now seeing throughout the economy.

There is one other argument. The Prime Minister has been saying recently that the days of laissez-faire capitalism and market fundamentalism are over. With great respect to him, they are not. The whole Goodwin display of shameless greed and the enormous bonus awards for failure of the RBS and HBOS directors just make monkeys out of the Government, as do also the extraordinary contortions dreamt up by Barclays to preserve its bonus culture intact, from Bob Diamond's £36 million a year downwards, plus its aggressive, convoluted tax havens maze, robbing the taxpayer of, it has been calculated, about £1 billion a year. Against that background, as we have seen in the last few days, the Chancellor is reduced to publishing soon a code of practice, which is not enforceable, unless he makes it enforceable in some way, stating that the banks are expected—expected—to obey the spirit as well as the letter of the law. I can only put it to the Chancellor that the only way to end this humiliating charade, with the banks running rings round the Government, is public ownership. I am quite prepared to say that it should be temporary; I am not in favour of public ownership for its own sake, but—temporarily at this time—it seems to make a hell of a lot of sense. That is the only way we can achieve what is needed.

It is almost incredible that such an obvious common-sense solution is derailed because of extreme ideological aversion even to the faintest whiff of public ownership. It exposes more sharply than anything that I can think of in recent years just how deeply embedded is that ideology in the minds of the political and economic leadership of this country. That probably applies to both parties. I think it is the defining element of the neo-liberal era. Adopting the most obvious, pragmatic and appropriate solution to public ownership at least cost in the current financial meltdown is not an ideological stance, but rejecting it out of hand certainly is, and the Government should think again.

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