Blog Archives

A ‘racket’? Government departments and regulators are protecting elites by covering up large corporations’ failures

The growing public awareness of this unholy alliance is leading to a rapidly increasing loss of confidence in our institutions of democracy, lower tax revenues, and cuts in healthcare, pensions, education and infrastructure spend.

Professor Prem Sikka’s latest article scathingly outlines the way in which regulatory bodies and government departments are protecting elites and corporations from retribution.

He cites seven examples, the latest being the refusal of the Financial Conduct Authority (FCA), the UK’s banking regulator, to publish its 361-page report on misconduct at the state-controlled Royal Bank of Scotland (RBS).

The 2013 Tomlinson Report showed that instead of rescuing struggling businesses, banks made money by asset-stripping and destroying them. This was followed-up an investigation by the FCA and in November 2016 it published what purported to be a summary of its full report. Subsequently, the BBC obtained a leaked version of the report. It referred to “inappropriate action” by RBS’s Global Restructuring Group (GRG).

The inappropriate action experienced by 92% of the businesses included complex loans, higher interest rates, and unnecessary fees. Businesses could not easily return to good health.

For the period 2013-2015, GRG handled 16,000 companies – and about 10% survived. Many ended up in administration and liquidation, with their assets were sold cheaply. RBS has set aside around £400 million to deal with possible claims.

The secret FCA report is not only an indictment of RBS, but also of other banks, accountants and lawyers. People are entitled to see the full scale of the scandal, and remedial legislation cannot be drafted without sight of the whole report. Yet the regulator’s impulse is to shield RBS and its accomplices.

Professor Sikka’s comment: “We can’t afford this racket” refers to the ‘knock-on effect’ as lower tax revenues (and a self-centred, heartless ideology?) lead to cuts in healthcare, pensions, education, public services and infrastructure spending.

 

 

 

 

https://leftfootforward.org/2017/10/six-ways-the-uks-regulatory-system-is-a-protection-racket-for-the-elite/

Media 67: mainstream media highlight bank’s decision to close RT, but not the retraction

natwestThe BBC recently reported that NatWest – part of the RBS group – wrote to RT’s London office saying: “We have recently undertaken a review of your banking arrangements with us and reached the conclusion that we will no longer provide these facilities.”

A letter posted online by the channel warns that banking facilities will be “cancelled and closed” on 12 December. RBS Group was reported to have said that the decision to suspend banking services to RT was final and not up for discussion:

“We assure you that we have only reached this decision after careful consideration, however our decision is final and we are not prepared to enter into any discussion in relation to it.” No reason was given.

RT, which is run by the Russian government, has – like British state radio – previously been accused of biased reporting

rt 

RT used Twitter to announce that its British bank account was being closed, adding sarcastically: “Praise be to freedom of speech!”

The Times has reported that RBS withdrew its planned action after Moscow claimed it would freeze the BBC’s finances in Russia and report Britain to the Organisation for Security and Co-operation in Europe, for breaching commitments to freedom of speech.

The Russian embassy said: “We are concerned over the said decision and the pressure exercised against Russian news outlets in UK. That is an outrage.” It added: “The Russian side will request explanations, including as regards UK’s compliance with OSCE and other norms guaranteeing freedom of speech.”

NatWest – more than 70% owned by the taxpayer – has now withdrawn its planned action and sources at the Treasury have distanced themselves from the bank’s decision.

 

 

 

Get a grip! The Co-operative Group is only one of 6000 co-operatives/mutuals in the country

Media,  large retail and banking interests give the impression that because one co-operative group is in difficulties the future of the whole movement is in doubt.

As Ed Mayo reminded Radio 4 listeners today, the Co-operative Group is only one of 6000 co-operatives in the country. Worldwide there are an estimated billion co-operators.

lincs 150 2 co-op

There are many regional independent co-operative groups doing well – an outstanding example being the Lincolnshire Co-operative. Above is a section of one poster; to its achievements should be added local sourcing, its renewable energy commitments and its assistance to the new University of Lincoln.

There is a wide range of successful worker co-operatives – see over 300 listed here. An outstanding example is a wholefood co-operative, Daily Bread (Northampton below and Cambridge).

The Daily Bread Co-operative

Despite the avid attention given to the Co-op Bank’s situation, readers should remember that it has not been bailed out by public money like Lloyds and RBS.

The Co-operative Group developed a corporate ‘big is beautiful’ approach – and believed in centralising control; it now suffers the consequence.

Those members who have sturdily refused to fall in line behind the vastly overpaid Euan Sutherland may yet be its salvation.an Sutherland may yet be its salvation.

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Teaching the gentle arts of failed speculation and rate rigging in schools: completing the corporate takeover of Britain?

Rage distracted me from my gentle Sunday plans – mixed with surprise that our government could display even more corporate-friendly arrogance than I thought possible. Are there no lengths to which they will go? No depths to which they will sink?

Yesterday an article by Elaine Moore, deputy editor of FT Money, was widely retweeted.

captive state cover2It opens by reporting a plan by the All-Party Parliamentary Group on Financial Education for Young People to invite high street banks – even those responsible for the consumer ‘mis-selling’ scandal of the past decade – into British schools to help to teach financial education.

Banks, including Lloyds, RBS and Barclays, would be considered for a list of financial service firms permitted to use branded material when making classroom presentations in English primary and secondary schools from September 2014.

And the Department for Education states that there are no rules to prohibit corporate involvement in teaching and the display of brand names in material used in lessons.

Financial education – and lessons in the art of form-filling until plain English triumphs – is undoubtedly needed in schools to equip pupils to cope with ‘the system’, but choose decent, honest, intelligent and well-informed people to give this instruction.

My candidate would be financial journalist Paul Gosling; name yours . . .