A LEAKED document obtained by the Labour Party has revealed that the Treasury faces a black hole of up to £16bn in its finances this year, as well as an additional £700m bill arising from a 25.9 per cent hike to Britain’s contribution to the EU!!!
In George Osborne’s March 2016 Budget, he pencilled in a £20bn fall in borrowing to £55bn in the current financial year – after repeatedly failing on his borrowing targets in the last Parliament.
The leaked document says that ‘Six months in, the deficit is only £2 billion lower than in the same period a year ago. . .’ and that borrowing was actually higher year-on-year in September, part of a ‘continuing a run of disappointing data’.
The leak continues that ‘For the year to date, the deficit is £2.3bn lower than last year; at a fall of 4.8 per cent, well behind the 27.0 per cent reduction forecast. . . implying overshooting the PSNB (Public sector net borrowing) forecast for 2016-17 by £15.9 billion.’
Clearly more savage austerity measures are on hand since Hammond insists that he is ‘committed to fiscal discipline’. At the same time, the Cass Business School has warned in a report for New City Agenda that ‘Unless we change the culture of regulators, we will be sleepwalking into the next financial crisis: This will have a devastating effect on our economy and political system. Crucial change following the 2008 economic crash is already being watered down.’
New City Agenda Non-Executive Director Lord Sharkey commented: ‘The New City Agenda report serves as a warning against the culture of box-ticking which contributed to the financial crisis, allowed widespread misconduct to occur and let bank executives escape sanction.’
The report’s author, Professor André Spicer, Professor of Organisational Behaviour, Cass Business School, said: ‘Britain’s financial regulators must change to avoid sleepwalking into another financial crisis that will have a devastating effect on our economy and political system.
‘If we want to avoid this, just making minor tweaks to the ever expanding rule book is not enough. We need to ensure a meaningful change of culture at our major financial regulators – they must practice what they preach. There is evidence of positive change but more needs to be done – or there is a big risk these important transformations will be derailed.’
The report finds: ‘Stuck in regulatory spin-cycle: Following a crisis, politicians respond to public outrage by introducing new legislation and more detailed regulation. However this new regulation is being progressively watered down. This lays the foundations for the next crisis.’
The report adds: ‘Forgetting the lessons of the crisis: The FCA (Financial Conduct Authority) scrapped its review of bank culture and is failing to make effective use of its new powers. The CEO of the FCA was removed in what was widely perceived to be a political sacking orchestrated by the Treasury. The PRA (Prudential Regulation Authority) is disagreeing with Sir John Vickers on extra capital as it has an unevidenced faith that its supervision will stop banks taking excessive risks.
Weakening rules designed to hold senior banking executives to account is the fastest example in over 300 years of watering down regulation following a crisis.’ The report says of policy makers that ‘There is an urgent need to reform the legislation that has allowed a culture of secrecy to develop in regulators by removing section 348 of FSMA (Financial Services and Markets Act 2000).’
The capitalist banking system is ‘sleepwalking to disaster’. The best advice that Cass can give is to try harder to change the ‘culture’ of the bankers. This is rubbish since the culture stems from the nature of their job, that is robbing the working class and the masses of the world. The culture of the bankers expresses the essence of the capitalist system, robbery with violence.
What is required is not an unachievable cultural change but a change of system, through a socialist revolution led by the working class, burying capitalism and laying the basis for a socialist society.
Some time ago Marx designated the working class as the gravedigger of capitalism. The Russian revolution, whose centenary is next year, proved his point, and now the UK and the world working class are being warned by the crisis to complete the job, on a worldwide scale, or face a disaster to their jobs, lives and living standards!