Responsible Capitalism: a European wave is building that Labour should ride

A year ago, Ed Miliband set out his vision of Responsible Capitalism, saying Labour was “determined to stand up against the vested interests that are imposing a surcharge culture on people”. In the past few weeks in Germany, the German trade union movement (DGB) has developed the idea of a new Marshall Plan for Europe. It is this kind of joined up thinking that we urgently need to build a credible alternative to austerity.

Judith Kirton-Darling is Confederal Secretary of the European Trade Union Confederation

A year ago, Ed Miliband set out his vision of Responsible Capitalism, saying Labour was “determined to stand up against the vested interests that are imposing a surcharge culture on people”.

He specifically targeted the bonus culture in the banking sector. This in contrast to the Conservative-led UK government which has both failed to rein in the excesses of the City of London and learn any real lessons from the past.

The recklessness of the financial sector that led to the 2008 crash was fuelled by the promise of bonuses of several multiples of annual salaries for traders.

Meanwhile, in the real world, the crash has led to a continuous credit crunch for the real economy ever since, despite the fact that there are €27 trillion assets under management in the EU looking for viable investment opportunities.

Over the last week, much has been made in the UK of the EU deal brokered by MEPs to cap bankers’ bonuses, and Cameron and Clegg’s opposition to it.

The rules, which would limit bankers’ bonuses to the equivalent of their salary, or two times their salary if shareholders agree to it, are set to be introduced next year and would represent the toughest bonus regime anywhere in the world.

On Tuesday, it became clear that the UK was isolated in its opposition, with George Osborne the only European finance minister to oppose the rules.

Many people in my home region, the North East of England, as well as across Europe, remain staggered at the size of bankers’ bonuses given the destruction they caused and the growing hardship experienced by ordinary people from austerity.

Public anger was clear last weekend when Swiss voters approved measures to curb executives’ pay and outlaw golden parachutes that can at times result on directors pocketing multimillion-pound payoffs.

MEPs have shown leadership in taking on the bankers to try and address some of the root causes of the financial crisis. It should be recognised that Labour MEPs help push this change against heavy lobbying from the banking sector and their allies in the UK government. All credit to them.

However, I’m struck that stronger shareholder powers and limits on bonuses are only elements in the regulatory shift needed to develop the ‘responsible capitalism’ Ed Miliband set out a year ago.

It is when we combine new regulation of the banking sector with the proposed Financial Transaction Tax (FTT), published on Valentine’s Day this year covering 11 EU member states, that we can start to put together a coherent agenda to rebalance our economies – promoting a healthy banking sector which channels resources to the real economy rather than speculation.

In the past few weeks in Germany, the German trade union movement (DGB) has developed the idea of a new Marshall Plan for Europe.

Using the revenue from a FTT and national wealth taxes as equity for a public investment bank – not dissimilar to the British Investment Bank proposed by Labour’s Policy Review – the DGB propose to use this equity to raise capital in the markets, creating an investment pool adequate to reboot the economy through active infrastructure and industrial policies, energy efficiency and greening, creating jobs and security for those in work.

Imagine the potential for such investments if Labour were to back the inclusion of the UK in the EU’s FTT proposals? It would create the capital needed to develop strong regional industrial policies and modernise the economy.

It is this kind of joined up thinking that we urgently need to build a credible alternative to austerity.

457 Responses to “Responsible Capitalism: a European wave is building that Labour should ride”

  1. Tom Walker

    Is this satire?

  2. Mick

    28 Trillion in board game money just lying around when Greece and other Eurozone fools have seen their economies flushing down the Europan.

    And we were even pressed into bailing out Greece with British taxpayers’ money and we’re not even in the Eurozone.

    No wonder David Cameron and noble Tory Backbench Eurosceptic patriots argue for renegotiation! Better still, we can just not hand over any more pocket money to the EU until they buck their ideas up.

    The EU costs us £50 million a day, just in MEMBERSHIP FEES.

  3. Newsbot9

    That’s right, it’s so terrible that we make tens of billions in trade, you can get us kicked out by acting illegally. Of course you need to hold basic rights, especially for workers, hostage to collapsing the economy, that’ll work just fine!

    It’s Britain which is one of the countries which is a drag on the EU now, thanks to our collapsing economy. Your arrogance and insolence is amazing. The reality is that the UK pays less of it’s GNI as a percentage than any other EU country, and the net contribution is 3.5 billion….or 9.6 million per day, not your fantasy figure of 50.

    It’s your austerity which is making companies not invest their cash, in reality, since you’ve suppressed demand! Moreover, many of the rights you want will reduce productivity…since, for example, German worker productivity is high in part because of their strict enforcement of working hour laws!

  4. Mick

    Illegal? But I recall newsbot saying EU membership was entirely voluntary and that we still had executive power!

    And as for Newsbot’s pride ‘argument’ about all that lost trade, that can be debunked by these next reports, clarifying that they’ll be no net loss to our finances if we leave the EU monolith:

    Google FAMILIES BETTER OFF IF WE QUIT EU SAYS WELSH ECONOMIST or IN EUROPE: A RISK FILLED CHOICE FOR BRITAIN or WHY BRITAIN WOULD BE BETTER OFF OUTSIDE THE EU BELATEDLY SPEAKING.
    ________________________

    Take THIS Newsbot: “Supporters of EU membership like to tell us that the EU accounts for half our trade. This was never true: the statistics are distorted by what economists call the Rotterdam Effect: British goods destined for non-European markets are often shipped through Antwerp and Rotterdam, thus showing up in the raw figures as “exports to the EU” . Now, even the raw data show that the EU accounts for a declining minority of our commerce. The latest official figures, published by the Office of National Statistics on 11 September, show that the EU now accounts for 43.6 per cent of our exports, the lowest share since the current measure was introduced in 1988.”
    ________________________

    And whinings about nations being generally weaker if they weren’t in the EU are rubbish too. Google GEORGE OSBOURNE TO EU: CHANGE OR WE LEAVE, or EUROPE WILL LOSE IF BRITAIN LEFT THE UNION.

    Or better yet,EU PATIENCE WEARS THIN OVER UK STANCE. They can be as impatient as they like, we’ve got back less than we put in for years. Especially with Prime Ministers surrendering all-important vetos to stop us being screwed over so much.

  5. TomSparc

    Even by your standards that is a dumb comment.

Comments are closed.