Tuesday, 24 July 2012

Southport needs local banks

Walk down Lord St and look at the old banking halls. There are long forgotten names like the Preston Bank..If you look carefully at the picture you can see Preston Bank above the door.

 The site of the Atkinson Library was once the headquarter of a Southport based bank. Names like Martins, Williams and Glyn were once well known. In America and Europe these banks have survived and not been swallowed up by large corporate institutions that 'are too big to fail'.

Many of the old banks were mutually owned -that is they were owned by their customers. Their chief concern was to serve their members. Earning the biggest and fastest buck was not the objective. They were a place where thrifty savers put their money.
The break up of LloydsTSB set me thinking and I wrote the following piece for the Southport Lib Dem website:


Southport Lib Dem Leader Cllr Iain Brodie Browne has urged the government dismember the big banks that have failed us.

'We need break up the big banks, force them to disgorge the building societies they swallowed and split them up regionally to rebuild our local lending infrastructure. Iain told local Lib Dems


'We must re-discovery the old banking creatures inside the belly of the big banks- local institutions like Williams & Glyn's, Martins, TSB and so on.
We need banks that are owned by their savers and not part of some large international group that doesn't care about people in Southport or local businesses

People have been taking a personal stand against bank scandals and moving their money to local, ethical or mutual financial institutions that they feel they can trust. But for many the local choice has been quite limited. So the sale of hundreds of Lloyds branches to the Co-op is not only good news for taxpayer but customers as well. 

Currently, the consumer banking sector is dominated by a small number of banks who have been taking their customers for granted. A healthy banking sector relies on diverse banks competing for customers by offering competitive deals. 

Liberal Democrats have long championed the mutual approach to business because mutuals give people a proper stake in the places they work, spreading wealth through society, and bringing innovative and imaginative business ideas to bear on meeting local needs.

We need a UK version of the Glass-Steagall Act, separating investment (casino) banking from retail banking. The real problem is this. It isn't that banks are somehow unwilling to lend money to small businesses; it is that they are no longer set up to do so. They have no local managers empowered to take decisions. They have risk software that rules out most deals. They have such onerous conditions and charges that many small businesses shun them altogether high street banking as Vince Cable has advocated. That seems to be a bare minimum. The Chancellor has resisted such radical moves but we must press the case

Banks that are owned by PLC's are only focussed on making a 'fast buck' they are simply not interested in the long term economic stability of a company or a locality. One of the greatest acts of economic folly was the destruction of the mutual banking sector between 1986 and 1999.

In one generation we squandered the capital accumulated over decades. We need to re-establish those local banks. Across Europe and America they have local banks and most of them have survived the crash. They have behaved ethically, they have not got involved in risky transitions and they have provided an import source of lending to individuals who want to buy property and small businesses who wish to expand


David Boyle over at the real blog and Susan Kramer have helped inform this posting.

Pugh remands pension fee reform

Pension funds whose high charges have 'torn the heart' out of savers’ retirements should scrap unfair terms and offer them new deals that do not penalise them, says Southport MP John Pugh.



Lib Dem Pension Minister, Professor Steve Webb MP has announced a clampdown on excessive pension fees. Hidden fees, charged by management companies, can wipe £100,000 off the value of a worker’s retirement fund.



The Lib Dems say that thousands of people are trapped in expensive old-style pensions, which can charge fees of up to 4 per cent of a pot’s value every year. Savers are even also being charged up to 20 per cent of a pension’s value if they try to switch to a better scheme.



The government would like to see the leading companies look again at their ‘back book’ of old pension policies.



“Perhaps the battered reputation of the pensions industry could be improved if they were to revisit these older schemes and offer scheme members fairer terms.” says Dr Pugh.



Lib Dems are warning pension managers that the Government will act within months to cap excessive fees if it has to. They are threatening to ban pension companies from being involved in the Government’s new auto-enrolment programme if their charges are too high. Under this programme, which starts in October, 10 million people will get workplace pensions automatically.



Pension funds that will run auto-enrolment schemes for businesses have already said that their annual management charges will be in the region of 0.5 per cent, which is “very low by historic standards” according to Mr Webb



“Every pound that savers put aside must be turned into the maximum possible amount of pension." says Dr Pugh, "I am pleased that the minister has said that, if further measures are needed to clamp down on charges, then we will not hesitate to take them.”



"Although, in general, pension charges are now coming down dramatically,some pension companies are still charging too much."

.

As well as looking at old-style pensions, Mr Webb is “watching” charging levels in so-called ‘default funds’, which are retirement funds where savers’ money is invested if they do not make an active choice about how their money is used.



Joanne Segars, the National Assn of Pension Fund’s chief executive, has called for much more clarity around charges. She says:



“People need to be very wary of high rates, and it needs to be much easier for them to find out what they are being charged, and why.”



Thousands of savers are stuck in old savings schemes which pre-date the 2001 introduction of stakeholder pensions, which are subject to strict regulation. Many of these old schemes from the 1980s and 1990s have terms that pension companies would not dream of offering to new customers today.

Last year, the National Association of Pension Funds (NAPF) said that fees are too high and that consumers face an “eye wateringly complex” system of hidden levies. It called for greater transparency when it comes to fees.

Trust in the pensions has hit an all-time low. The NAPF has warned that Britain is “sleep-walking” into a pensions crisis. The number of people contributing to personal pensions fell by 400,000 to six million people between 2008 and 2010.

Research by the think tank RSA found that nine in 10 of Britain’s biggest pension fund managers fail to warn people about hidden fees. Workers are routinely being denied low-cost pensions that are readily available elsewhere in Europe.

Sunday, 22 July 2012

Ronnie's strawberry tea party


It was good to see Norwood Ward in fine fettle yesterday at Ronnie Fearn's Afternoon Tea. There was an excellent turn out of supporters including one of Southport's Olympic torch bearers.

Mike Booth has also reported on the even here

Tuesday, 17 July 2012

Considerers and Borrowers equally tiny and insignificant

Southport's MP has been making some important observations over the weekend in an article in the Observer.  Not least amongst them is the exploding of the Westminster Village myth that there were a group of voters who would step up and fill the void left by those electors deserting us because of the coalition.


The deputy PM, .........' has had to recognise that being in government has not by itself won a whole new range of voters who it was said previously "considered" the party but doubted its capacity to make tough decisions and declined to vote for it. These hoped-for new Lib Dem voters ,"the Considerers", have proved as elusive and shy as "the Borrowers" in Mary Norton's children's classic – very tiny and almost invisible.'

He has also asked some key questions:


So need this spell doom for the coalition as Cameroons, Orange Bookers and Blairites, who collectively occupied the same crowded, cultural and political space, are forced to hearken to the primal instincts of their respective parties? Need the Lib Dems, as Tim Farron urged us two years ago, get an exit strategy in place? Are we seeing the scaling back of ambition or the end of hubris, depending on your take?




The truth is that we all knew whoever won the last election would have been forced into some pretty unpalatable policies -which is why Alister Darling was warning that the cuts would have been worse that Thatcher if Labour had been in power. In truth the Darling package is broadly the same as the Coalitions, in fact some analysts think that it would have been more severe. All this is irrelevant because Labour are in opposition and being opportunist. The key battle ground is what happens next. The markets have decided that the government has a credible deficit reduction policy and now is the time to move to phase two; taking advantage of that platform to get the economy moving. In that context, rail infrasture spending, housebuilding and banking reform are essential elements.

Clearly this week there will be an announcement that the government are going to offer some for of loan guarantee for social housing. Housing Association have considerable land banks with planning permission granted than could be developed if the finance was available. Vince Cable's recent advocacy of this approach alongside the published research of Professor Nick Crafts adds credibility to this move.

Banking reform was in the coalition agreement and there is no secret at Lib Dems wanted to go further than Osborne wished or Labour ever proposed. I think the chance now exists to revisit these proposals. First we can push for a complete split between investment and retail banking, secondly we can do more to split up the retail banks by creating regional banks and not by just adding another PLC bank to the existing mix, but by reviving the mutually owned sector. We need different sorts of bank. The Building Society Act 1986 paved the wide for the destruction of the mutual sector and Labour did nothing to stop it, in fact under their watch some of the biggest de-mutualisations took place. As Prof Crafts explains it was the Building Societies that in significant measure funded the move out of recession but so enamoured were New Labour with markets etc they did not lift a finger.








Monday, 16 July 2012

The men of Birkdale at the Battle of Festubert

Every year at the Remembrance Service in St John's Birkdale we sit and listen whilst members of the youth groups read out the names of the men of Birkdale who died in war. Listening to Bruce Hubbard the other week at Full Council talking about the Battle of Festubert in May 1915 I got to wondering whether any of the men of Birkdale died in that battle.

Fortunately at the back of the church thater is a file whilst lists all the men on the memorial and reports the research* that has been carried out them . There are two soldiers who served with the 7th battalion, King's Liverpool Regiment who died in May 1915; Private Robert Johnson Clough (2587)  and Private Robert Brade (2792) also of the 7th Battalion who was born in Birkdale and lived here until he enlisted.

Private Clough  died of wounds -gunshot to his left forearm -on 26th May 1915. His parents lived in Richmond Rd Birkdale. He was brought back to Britain and the Eastern Hospital in Cambridge. He was a member of the 4th Platoon A company (which fits in with Bruce's research). The file in St John's says:

' he received his wounds in the engagement in which his company took part on May 16th 1915. He was 27 years of age, and prior to joining the 7th Kings he was an insurance agent, and also associated with the Y.M.C.A. at Southport'

Little is know about Private Brade. One other soldier seems to have been at the battle, Private John Whiteside. His family lived in Shaws Rd.,  Birkdale-and still do. He was wounded in May 1915 and returned to front by Christmas the same year and died in September 1916.

Bruce has given me his notes about how he came across the link between Southport and Festubert.:

Dining in Albert with a friend a couple of years ago, I noticed that we were eating at 17, Rue de Birmingham. My friend explored this, and wrote up an article about how Birmingham had "adopted" Albert, on the Somme, in 1920. I wondered if this altruism was a one-off, but soon found a list of all the places in Britain that had also adopted a town or village in France in 1920. Southport and Festubert jumped out at me. Three questions came to mind:-
1. Why had Southport adopted Festubert?
2. What did Southport do about it?
3. Why didn't I know anything about this?
I started asking councillors, and officers, and found that my ignorance was shared.
It soon appeared that Southport's interest in the village was linked to the 7th battalion, Kings' Liverpool Regiment. A Company recruited in Bootle, B and C Companies in Crosby and Formby, and D Company in Southport. As a result, this territorial Foece battalion really was from all of what is now Sefton (with the exceptions of Maghull and Aintree)
The 7th Kings were at their annual camp when war broke out. They nearly all volunteered for overseas service for the duration of the war. They completed their training in Britain, and landed at Le Havre in February 1915.
During the first winder of the war, many plans were drawn up, and the French planned to try to capture Vimy Ridge. They asked the junion partner in the alliance to attack further north to tie down German reserves. The French attack was a disaster (see the 44,000 headstones at Notre Dame de Lorette French Cemetery), and the British attacked at Neuvre Chapelle, Aubers and then, on May 16th 1915, at festubert. It was on the latter date that the 7th Kings went over the top for the first time, and for many of the men, for the only time. Over 150 men from Sefton lie still in one of the three cemeteries around the village, or else are named on the Le Touret Memorial to the Missing. Twice as many were wounded. By the time the attack was called off ten days later, the line had been advanced by about a kilometre on a three kilometre front - a success by 1915 standards. However, this was at the cost of some 16,000 casualties.
Festubert was battered by the artillery bombbardment in 1915, and again twice in 1918, ensuring that when the villagers returned to try to rebuild shattered homes and lines it was to a see of devastation, with many homes being little more than smears of brick dust in the mud, and fields covered in shell holes. It was against this background that Southport adopted the village.
Festubert lies on an open plain of agricultural land. To the south lies Lens, with its slag heaps, to the west is Cassel (where the Grand Old Duke of York couldn't make up his mind) and to the north is Armentieres, made famous by a wartime song about the entertaining young ladies. It is not a large place, since its population at the last censes was under 1,200. It is built around a cross-roads, near which there are playing fields.

On one side if a new sports hall, but in the foyer is a stone plaque, declaring it to be the Southport Memorial Hall, for the original was dedicated in the 1920's as a result of fund-raining in Southport. Local school children went on cultural visits from 1922 until 1939.

The Southport vister reports that a Mr Philip King as saying: “The villagers of Festubert were over the moon when the hall was built, but I understand that it has since fallen into disrepair, so it would be fantastic if the links between the two towns could be re-established.

(In  a gentle and courteous way Bruce puts the record straight. 'Unlike Phil King, I have been to Festubert.I have no idea what plans the villagers have to commemorate the centenary of the battle in 2025, nor how a letter of friendship from the Mayor of Sefton will be received by his opposite number, M. Jean-Pierre Douvry. If we don't ask we will never know.


The Southport Memorial Hall was built in the 1920's with money raised in Southport. There was a plaque placed at the entrance, declaring it to be the Southport Memorial hall. When the building was replaced with its current modern building, the plaque was placed on the wall in the foyer. Far from being in ruins, the modern sports hall is in a good state or repair.')


Festubert is thus part of our heritage, and we would be foolish to ignore our heritage

*I understand the research at St John's was carried out by Stuart Baker)
Details of Bruce's motion to council can be found here

Friday, 13 July 2012

Southport and the Battle of Festubert

One of the highlights of the last full council meeting was the speech by my colleague Bruce Hubbard. Bruce-who used to be a History Teacher in Southport-now leads tours of the WW1 battlefields. On one recent trip he came across a Sports Hall in the village of Festubert called the Southport Memorial Hall. Bruce worked away at the connection between our town and this small village and proposed this motion to the Council

To consider the following Motion submitted by Councillor Hubbard:

"The Council notes that:-


1. the centenary of the battle of Festubert will be in 2015;

2. in excess of 150 men from what is now Sefton, died in that battle; and

3. in 1920, Southport "adopted" the village of Festubert, raising money

and establishing a cultural visits programme on an annual basis.


The Council calls upon the Mayor to send a letter of friendship to the Mayor of Festubert



Bruce made an excellent speech in what was otherwise a bad tempered meeting and was warmly applauded by the whole council. I have asked him to write some more for the blog but in the meantime here is a link to the briefing note he provided
http://modgov.sefton.gov.uk/moderngov/documents/s39223/Festubert%20Briefing%20Note.pdf

part of which reads:


In 1920, the British League for Help summoned representatives of local



authorities to a meeting at the Mansion House in London. Subsequently, a


large number of British towns and cities "adopted" (such was the word then


used) a place in France. Birmingham adopted Albert on the Somme.


Liverpool adopted Givenchy - the village not the perfume - where many of its


men fought so gallantly in 1918.


Southport adopted Festubert.


Money was raised in Southport - sufficient for the building of a sports hall in


the village. The original has been replaced by a more modem structure, but


the foyer of the salle des fetes bears the original plaque naming it the


Southport Memorial Hall.


Between 1922 and 1939 (when German visitors returned) parties of Southport


schoolchildren went on an annual cultural visit to Festubert These visits were


not restarted after World War Two Veterans of the battle of Festubert in 1915


met up every year in Southport on its anniversary until the 1990's, when there


were but five elderly men remaining. The last official visit of any kind (which


this author can trace) was in 2000 when the Southport Branch of the Dunkirk


Veterans Association diverted to the village to lay a wreath at the village war


memorial, The latter is a rarity, for it not only lists the men, and women, of the


village killed in the Great War, but also "Les heros Britannique mod pour la


France."

Quote of the day from Elliot Dodds in The Unservile State

Oliver Smedley and others had left the Liberal Party and set up the IEA by the time the Grimond revival had got going properly. The publication of the Unservile State in 1957 was the manifesto of the revival and as is pointed out in the introductary chapter it was the first full scale book on the attitudes and policies of British Liberalism since the 1928 Yellow Book,

I was much taken by this passage from Elliot Dodd's chapter:

The business of Liberals today is to show by a practical and relevant how Liberty and Welfare can be consistently pursued with the aim of giving  'more abundant life' to the individual person-Liberty conceived as not merely freedom from restrictions, but as the enlargement of scope for the exercise of responsible citizenship: Welfare conceived, not merely as cash and comfort, but as providing opportunity for moral,intellectual and cultural development such as is frustrated when men are obsessedby anxiety about the bare business of living; and both encouraging adventure, experiment, colour, variety and eccentricity. Thus may Liberals re-establish themselves in their natural position as the acknowledged leaders of the Left.

Tuesday, 10 July 2012

Too easy to slag off Labour

It would be so easy to deal with Labour's tribal opposition to House of Lords reform but responding in like manner. Nevertheless I hope we can rise above that.

 Don't get me wrong I think those who Ms Toynbee described as 'knuckle dragging neanderthals ' deserve all the grief that can be heaped on them but let's recognise that they are not all wreckers or ignore that there are some 'Hedgers and Ditchers' in our own ranks-did you read Steel's rant?
If we are to make progress on this agenda we need to rally constitutional radicals where ever they are found and there are sincere friends of reform in the Labour Party

Early on yesterday one Labour MP tweeted:
Lords reform today. best chance of reform for 25 years. Hope we don't mess it up

Later in the day the journalist John Rentoul observed:
Ouch. Graham Allen, Lab chair of select committee, asks Sadiq Khan if he realised that Lab seemed insincere in its support for reform?

Of course there are Labour people who only calculate party advantage and see it as a sign of weakness to listen to argument but if our approach to politics is to prosper we're just going to have to get over that.


Monday, 9 July 2012

What might Gladstone have made of the financial crisis?

You may not have woken up this morning with that question on your lips- but it is one worth thinking about and the folks at Gladstone's Library have been doing just that:
The http://www.st-deiniols.com/blog/2012/06/22/what-might-gladstone-have-made-financial-crisis/

listen to ‘Graeme Nuttall: Employee Ownership’ on Audioboo


The blogs coverage of the launch of the Nuttall Report made it to the Featured on Liberal Democrat Voice this week. Those interested can hear the audio of the launch following the link above

Friday, 6 July 2012

Birkdale Councillors surgery

This Saturday Birkdale Lib Dem Councillors will be at the Library on Liverpool Rd from 2pm onwards to hold their monthly surgery-no appointment needed.

Coast Rd success!!!!!!

It has taken its time but the campaign for speed safety measures pursued amongst others by Haydn Preece, Tony Dawson and David Pearson has finally come to fruition! At Full Council last night the following question was asked:

Question Submitted by Councillor Dawson



“When are the Speed Reduction advisory flashing signs likely to be erected on the Southport Coast Road?”
Response:

To inform the response I can confirm that the poles went in on Tuesday this week and the signs should be mounted by the end of the week.





Southport Learning Partnership


Yesterday I was very pleased to attend a meeting of the Southport Learning Partnership which brings together most of the schools in the town. It is an excellent initiative that has achieved much in its short life. It was a delight to see presentations of the various projects that the partnership have promoted.  I was particularly pleased to learn more about the 'Hillside Helpers' in which Farnborough Rd Schools are involved  . Like all the other project teams it is a co-operative venture between various schools-High Schools, Infants and Juniors etc and together they have adopted Hillside Station. Anyone using the station cannot help but be impressed. I understand that they are now preparing to enter the station in the Britain in Bloom contest. I shall take some photos for the blog.

The three other projects are: 'You can Dig' with King's Meadow, Shoreside, Ainsdale St John's, Merefield,, Birkdale High and Presfield High, 'Traffic Stoppers'  with St John's Crossens, Marshside, Bishop David Sheppard and St Patrick's, 'The Green Machine' with Holy Trinity, Holy Family, Larkfield, Meols Cop, Norwood, an St Philip's whose strapline is 'The Green Machine is quick and snappy and makes our community clean and happy!'

I learnt that my colleague Richard Hands had been approached and met with the team at Hillside Helpers and they reported that he gave them good advice! The students-of all ages -on the school councils had also met with John Pugh MP at the Town Hall (he had also met with one of the other teams)and had clearly 'activley listened'  them. I should be recorded that most of the local politicians that the students had come across had been helpful-there was one exception, a pompous windbag who spoke over the children's heads, but we shall draw a veil over that.

I met the new Head from Birkdale Primary. Richard Hands is his Chair of Governors. I know many in the local community have been impressed with the progress Birkdale Primary has made. As the school's website says: 'Birkdale Primary was built in the 19th Century during the reign of Queen Victoria, the foundation stone gives the date of 1885. The school has a very important place in the history of education in this country, as it was one of the first 'School Board' schools to be opened' What I didn't know was that the first teachers' strike happened at Birkdale  Board School. I really must look into that in a bit more detail. Apparently the strike was over school discipline-the teachers felt the Headteacher was too harsh!

Readers of this blog will be aware of some of the history of the Birkdale Board School from previous postings. Most of these featured Kate Riley :

The first women to serve on any public body in Southport was a Birkdale Liberal, Kate Ryley, way back in 1889. In those days there was a separate local authority in Birkdale and it had its own education board to oversee Board Schools set up by the 1870 Education Act. Unless my memory is faulty the Birkdale Primary School in Bury Rd was a Board School. Miss Ryley was appointed to the Birkdale Education Board in 1889 and when it was abolished she was appointed to Lancashire County Council Education Committee until she resigned in 1925.







Kate Ryley was an active the Women's Liberal Federation and in the movement for women's sufferage in the town being a prominent member of the local Women's Sufferage Society. Her list of activities promoting both women and education is impressive. I particularly liked her initiative to help teachers get access to the books they needed by starting the 'Pedagogue Library'. Following her parents example she was closely involved with the work begun by Josephine Butler who did so much to reform the law as it impacted on prostitutes and worked with the delightfully named Moral and Social Hygiene Association.






She even stopped paying her local taxes as a protest against the failure to provide proper educational facilities for 'underprivileged' children' She would clearly be delighted with the Pupil Premium which has brought in several million pounds to Sefton targeted on the most disadvantaged pupils


It was a great event held at the Southport Ramada Hotel. I was genuinely impressed with all I saw and David Atkin's and his team can be justifiably proud of the work they have done


 
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Thursday, 5 July 2012

Percy Vole and the freemasons

Somewhere back in the archive there is a copy of a Southport Liberal newspaper circa 1962 which mercilessly sends up the the Tory MP Sir Ian Percival. My memory is that Jack Smith Hughes was involved. There were very few Liberal Associations who reached that level of campaigning -Chris Renard was scarcely in short trousers.  It was certainly more vicious than anything we would put out today. The editors pet name for Percival was Percy Vole. This came to mind when David. Tattersall drew to my attention a passage in Chris Mullins book:


Another Mullin nugget from his political diaries (1994-1999) "A Walk On Part" at a time when he chaired the Home Affairs Select Committee and succeeded in getting it to investigate Freemasons, with his own personal interest in police lodges and similar.
 
 19 February 1997. "We had our first Freemason to the select committee this afternoon.  Sir Ian Percival, a former Solicitor General.  An amiable, complacent old buffer who assured us that everything was for the best in this best of all possible worlds.  I managed to get under his skin and he accused me of being smug, which is a bit rich."

Wednesday, 4 July 2012

Why did Labour do so little about mutuals?


I was delighted to hear from my old friend and former Southport councillor David Tattersall. He has been following the postings on mutuals/employee ownership and has been reflecting on why Labour made so little progress on this agenda. I was always struck that where they did speak of mutuals it was in relationship to de-nationalizing public services. That certainly seems to be the case when they set  up the Ownership Commission. Norman Lamb speculated that trade union objections scuppered progress.  Labour's antipathy goes back a long way to the Webbs who opposed producer co-ops preferring not to trust workers and putting their faith in state ownership. David writes:

I've been reading the various diaries (three books) of  "left winger" Chris Mullin, MP Sunderland South (1987-2010) and some of the quotes below might be worth  including in your blog.    Chris Mullin's classic political thriller novel "A very British Coup" won a Bafta and other awards and he wrote the book "Error of Judgement - the truth about the Birmingham Bombings", the subject on which he successfully campaigned tirelessly for justice.
 
"I fully support your recent blog about our party's longstanding support for mutuals. Something we should shout out loud at the current time ! 
 
 But if you Google the Co-operative Party and search you will find some negative and misleading stuff about us and the coalition and our claimed lack of interest in mutuals.  As a "sister party" of Labour, with, I think from memory, some 30 "Labour and Co-operative MPs", including Mr Balls, what did Labour achieve during its long period of office to promote mutuals and workers co-operatives ?  And the co-op give thousands of pounds every year to Labour !!
 
On this subject, Chris Mullin, a former government minister, says in his diary January 1996:" All the little Blairites are rushing around talking about the stakeholder economy as though they have been familiar with the concept all their lives." He adds that another MP said to him: " If stakeholding is such a good idea, why have we had nothing to say about the destruction of 'mutuality' in the building societies? - surely the very essence of stakeholding."
 
Mullin adds: " Quite so. The reason is, of course, because the societies are handing out big dollops of money to their members in exchange for their acquiescence and we dare not offend the middle classes by uttering home truths about greed and short-termism."

Clegg: Liberal alternative to 'dog eat dog' capitalism

Featured on Liberal Democrat Voice  We are delighted that thisposting on the launch of the Nuttall report made it into the 'Golden Dozen ' this week




This should be a big day for Liberals. For generation we have promoted a vision of an an economy where businesses are owned by those who work in them, where as Richard Wainwright used to say 'labour hires capital'. Today we made a big stride in that direction, so why is it that Lib dem bloggers tell so little about the Nuttall report?

In his new role Norman Lamb commissioned Graeme Nuttall to produce a review of employee ownership. Today Nick Clegg and Norman Lamb launched the report. Clegg's speech can be found in full here he told his audience that 'we are on our way, driven by the vision of an economy in which more power rests in the hands of ordinary workers'. He went to say:

dog-eat-dog, laissez-faire capitalism

'Thirty-five years ago, one of my predecessors as party leader, Jo Grimond, visited the famous Mondragon workers co-operative in Spain. He came back inspired and became the first chairman of Job Ownership Limited, promoting employee ownership. Grimond was drawing on a rich liberal tradition. For liberals, employee ownership has long proved that the choice we face is not simply between dog-eat-dog, laissez-faire capitalism - or union-dominated, uncompetitive socialism. John Stuart Mill believed that employee owned firms, co-operatives and mutuals could help to end what he described as the ‘standing feud between labour and capital’ creating fiercely competitive firms, fighting for profits and customers in a competitive market but where employees have as big a stake in them as possible.'

The big thing that Grimond brought back from Mondragon was his admiration for the mutual bank that the workers' co-ops had established and which was crucial for their expansion. In that context the question put to Clegg by the Yorkshire Building Society is important ' in view of the banking scandal should govt be encouraging financial mutuals ?'  This is a question with which this blog has been concerned. There is a real opportunity during this parliament to promote a significant expansion of mutuals in retail banking. After all the government owns retail banks and they would dearly love to dispose of them. These could be the basis of regional mutual banks who could purchase them from the government over an agreed period.. As Clegg went on to say:..,.banking stories show the need for power to be distributed to new hands.



I suppose the best known example of an employee owned business today is the John Lewis partnership. In days gone by the big example used by Liberals was the Scott Bader company. I did look up the UK example  used in the 1928 Liberal Yellow Book which was a Yorkshire woolen mill, Taylor's of Batley, sadly it has been wound up. Nevertheless I did find this report from the Catholic Herald of 1936 which outlines its success in that recession. Any way back to John Lewis, their boss Charlie Mayfield pointed out that Germany has three times the proportion of non PLCs to PLCs than UK. The dominant form of business ownership in the UK is the PLC and it is a very regressive form of ownership compared to many other countries. We need to plot a credible route to change the balance so that employee ownership accounts for a bigger share.


It is worth reflecting that for many Liberal part of their advocacy of employee ownership has been that it redistributes wealth. The 1938 Ownership for All policy described the mal distribution of wealth as 'gross and shocking'. It is worse than that today! I quoted a bit of a paper from a US  academic the other week which is in line with the policy championed by Prof James Meade and (even) David Steel:



I am of the opinion that we can’t address the problems we’ve got just with the standard fare of income-based measures and government transfers. Given the scale of problems that exist when thinking about economic inequality, the idea that we can bridge the gaps that exist through these traditional strategies, through government transfer payments, earned-income tax credits, or whatever you may come up with, is really not enough. If you’re looking at the drivers of income inequality, it’s not just paychecks, it’s wealth. Rich people are rich because they own stuff and that stuff gets more valuable as they sleep. The greater mass of the population is being asked to survive on paychecks—on income. That’s a race they’re never going to win. Strategies that intervene at the point of ownership of productive assets of business are, therefore, an important place to be.

We need to include distribution of wealth in our vision of workers' ownership













Tuesday, 3 July 2012

Banks-shareholders are part of the problem not the solution

Bob Diamond did not go because of the actions of shareholders. The BBC's Robert Preston was reporting on the Today programme that major shareholders wanted him to stay. The governance of banks will not be fixed if we rely on shareholders. Self preservation may have prompted Sir Mike Rake to act but that is not a reason to duck the question about poor governance in the banking sector-and if he was pushed because he fingered the Bank of England that is no real comfort either.

Last week Vince Cable was asserting that the 'biggest act of economic vandalism' in recent years was the destruction of the Building Societies. I would also add the forced privatisation of the TSB.

I am not here talking about 'investment banking', I am more than happy if Vince gets his way and the so called investment banking is completely split from High St banks. I think it is fair to conclude that the idea that 'chinese walls' could be put in place between the two functions in the same bank always stretched credulity, it is now not an option and amendments have to be made to the proposals in parliament. Those who want to invest in casino banks take the risk and cannot expect the government to bail them out. Our chief concern should be the retail banks where people put their pay cheques and their savings. It is in this area that we need to champion the cause of mutually owned institutions.

The government owns retail banks. Instead of selling them back to shareholders whose single interest is to build shareholder value and who -by and large- are disinterested in the ethics and governernance of the banks we should be handing them over to their customers and allowing them to pay a fair purchase price over time as suggested in the Oxford University report 'Promoting corporate diversity in the financial services sector'

Liberals have for generations challenged the dominance of the owners of capital in all enterprises. From J S Mill on through Keynes and Grimond we have argued that other stakeholders-in most cases employees- should have a share of the decision making. Shareholders have one interest , namely that the dividend and the value of their share grows. They are  very promiscuous, they buy and sell at a moments notice.Often they don't even know they own the shares. Modern digital trading means shares are bought and sold in the twinkling of an eye. Significantly they are held or managed by other financial institutions that are only concerned with shareholder value.  All this means that there is little long term planning and everything is a bout short term gains and hence risk taking.

The model that is better suited to retail banking is the mutual model where the bank/building society/credit union is owned by the savers. Those who manage such bodies are focused on the needs of their members. I am convinced that if we had maintained our mutual sector they would have developed products that would have helped pay for their members long term care for example. They certainly would have taken less risks and paid their CEO's a realistic salary.


The government has made some welcome steps in this area last week it was reported that Credit Unions will receive up to £38million from the Government to expand and modernise, it has been announced, with the target of putting the infrastructure in place to be able to support one million extra people.


But frankly this is 'nano-fry' compared to the scale of the problem. The mutual sector used to be a major part of the financial scene. The democratic ownership it promoted is very much part of the Liberal ideal. It spread wealth. Gereation after generation that wealth grew but Thatcher and that most selfish of generations cashed in the asset and squadered it in a moment. We have to rebuild that model of thrift and common ownership and turn our backs on the crude market capitalism embodied in the present dominant model of ownership the PLC. We need our financial institution to look to the long term and to put the interest of their savers first.


According to figures from the Department of Work and Pensions (DWP), just two per cent of people in the UK are members of a credit union. This compares to 24 per cent in Australia, 44 per cent in the United States and up to 75 per cent in Ireland. Full story http://www.thisismoney.co.uk/money/saving/article-2165456/Credit-unions-receive-38m-Government.html  


I was listening to a Radio 4 programme on banks and the desire for safe, ethical institutions came across very clearly from the listeners feedback. We need to champion this cause and bring back locally owned retail banking