LABOUR Chancellor Rachel Reeves is committing the Labour government to follow in the footsteps of US president Donald Trump by enthusiastically embracing policies to cut all restrictions on the banks and industry in a desperate attempt to ‘grow’ British capitalism out of recession.
Reeves has backed plans proposed by the Financial Conduct Authority (FCA) to ‘ease’ restrictions on bank lending for mortgages.
Restrictions were introduced by governments across the world in the wake of the global banking crash in 2008.
Then banks had engaged in a massive orgy of handing out loans regardless of the ability of their clients to afford repayment.
The result when these loans became unrepayable debts – debts that had been sold across the banking world as being absolutely secure ‘assets’ – was to crash the banking system.
Restrictions on bank lending were brought in to reassure workers that this would never happen again.
The FCA currently restricts banks ability to lend mortgages valued at over 4.5 times the borrowers income.
The banks are also required to do ‘affordability tests’ designed to ensure borrowers can afford increases in interest rates.
These restrictions Reeves now wants to end as Prime Minister Keir Starmer demands that regulations restrict the ability of banks and corporations to maximise profits.
According to Reeves earlier this week, relaxing restrictions on mortgage rule would help increase levels of home ownership and boost economic growth.
However, as the Telegraph reported this week, even the chief executive of the FCA, Nikhil Rathi, is worried that relaxing restrictions on mortgage lending could result in the number of home repossessions doubling.
Already in the final three months of 2024 banks and mortgage lenders repossessed 990 homes – 39% more than in the same period of 2023. This increase was despite the mortgage charter signed up to by the banks designed to limit repossessions for mortgage arrears.
Rathi told a select committee of MPs on Wednesday: ‘When the mortgage charter came in last year, pretty much every major party said keep repossessions down, and we did. That is not consistent with relaxing the lending standards.’
What it is consistent with, is the programme being followed by Starmer and Reeves to end all restrictions on the banks and industry, in a desperate attempt to stem the economic collapse of British capitalism.
If this means thousands of workers and increasingly middle class home owners finding mortgage repayments impossible as the cost of living continues to spiral out of control, then that is a price Starmer is prepared for workers to pay.
In a clear signal that the Labour government is preparing to let the banks, industry and the Silicon Valley multi-billionaires directly take over the British economy, it was announced this week that the chairman of Britain’s anti-trust Competition and Market Authority had been sacked and replaced by Doug Gurr, a former executive of Amazon UK.
Amazon is owned by the world’s second richest man, Jeff Bezos a leading supporter of Donald Trump, and its UK arm is notorious for its opposition to trade union recognition at any of its sites in Britain.
Recently, Amazon bosses were questioned by MPs over workers’ injuries and safety issues at the company’s sites, following reports of 1,400 ambulance call-outs for employees over the past five years.
Bringing in a former Amazon boss to oversee regulations on business competition, is a clear sign that the Labour government is now completely under the control of the bosses and bankers.
The demand from the capitalist class, is that the Labour government makes good its pledge to bring down the national debt through massive cuts in public spending, while setting the banks and speculators free from any restrictions.
The powerful working class will never accept being driven into the gutter of destitution by a Labour government that is firmly in the pocket of the capitalist class.
Now is the time, for the mass of workers to demand their trade union leaders end their support for Starmer’s government, and either start fighting or be sacked and replaced with a leadership prepared to force the TUC to call a general strike to bring down Labour and bring in a Workers Government.
A Workers Government will expropriate the bosses and bankers and build a socialist planned economy.
This is the way forward!
