Banking and morality - the debate continues

The news that banks appear so quickly to have forgotten the crisis into which they plunged us all has not gone down well. This appears to be the case in government.

To some extent, that banks are generating operating profits now is what we want - we need banks to be profitable to help restore the financial system. However, the sector has to work out how to do things differently and how not to cause such chaos again. It must recognise that it has required taxpayers to assent to a massive state intervention, for which they will be paying for some time to come.

Speaking at the Financial Times Global Finance Forum on Friday, Financial Services Secretary Lord Myners stressed that while the government was determined to regulate the financial sector, regulation alone was not sufficient. Banks needed to take responsibility:

"Corporate leaders in the global financial sector have begun to talk about addressing moral failures and that is to be welcomed. But it’s time to move beyond sound bites and to start hearing how they intend to drive moral reform within their institutions."

Some sort of repentance, a changing of behaviour, was required argued Lord Myners:

"The banks need to understand that they have lost the trust of the public, and need to change their behaviours and values in order to earn forgiveness."

The speech can be downloaded from the Treasury website here.

I'm speaking on this theme at Labour Party Conference at a CSM seminar.

Stephen Beer, 20/09/2009


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Lambeth's ray of light

Congratulations to Mark Harrison, elected as a Labour councillor for Princes ward in Kennington (Vauxhall constituency) on Thursday. Mark received 1,726 votes, or 41% of the vote, compared to the LibDem candidate who had 1,396.

The Tories did not get the surge for which they had hoped, receiving 707 votes. Turnout was almost 43%.

The by-election was fought under very difficult circumstances given the national situation but we were able to show that voters will support a Labour council that is actively implementing Labour values at a local level - and a candidate who has a record of standing up for residents. The election also showed that Labour is active on the ground running effective campaigns.

Stephen Beer, 21/06/2009


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Economy appears to be stabilising

Easy to forget that only a couple of months ago it was considered almost insulting to suggest the economy might not perform as badly as many were suggesting. Now, sentiment has shifted the other way. But Labour has to keep focused because even if the outlook has improved we need to improve the prospects for business and fight rising unemployment.

The G8 leaders at the weekend noted that the global economy appeared to be stabilising. That's perhaps not surprising considering the dark days at the beginning of the year, when the financial sector remained in serious trouble and many businesses could not even access day to day credit facilities from banks.

Alistair Darling, the Chancellor of the Exchequer, has had to withstand the shifts in economic sentiment. His Budget forecasts were dismissed as too positive. Now some commentators imply that he may have to revise them upwards. Darling has cautioned against over-optimism.

Former Bank of England MPC member David Blanchflower has echoed the caution and emphasised the potential for unemployment to rise much further this year. It will especially affect young people seeking to enter the jobs market for the first time, he has said on various occasions.

This further underlines my call for a clear message from Labour about jobs. We must do all we can to limit the rise in unemployment, help people obtain new skills, and help those out of work find work. The contrast with the past two recessions under the Conservatives must be clear. Labour will never see unemployment as simply a 'price worth paying'.

Stephen Beer, 15/06/2009


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Labour should not despair but get on the front foot

Labour Party members should not let the European election results tip them into despair. A lot was going on around these elections.

Yes, the Labour vote did fall significantly. And the two BNP victories together gave a nasty jolt. The wider context was that pro EU parties and parties on the Left did not do well (and note that the LibDems did not reap benefits from Labour's unpopularity; nor did the Tories gain as much as they should have expected). At the same time, last Thursday was the first opportunity the UK electorate had to express its disgust via the ballot box at the expenses scandal.

It was not all bad news of course. In Vauxhall we won a by-election with a candidate with a good local track record, with a clear message about what we stood for, and by a well-organised campaign.

So, with the Parliamentary Labour Party expressing its support for Gordon Brown this evening and a reshuffled cabinet in place, where should we go from here?

I am still convinced that we need a positive political narrative that recognises economic times are hard and recognises that spending limits mean we need to find other ways to promote our values. There is still time for creative thinking in this area which will also contrast Labour's policies and values with those of the Tories. But not a lot of time.

Stephen Beer, 08/06/2009


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