FOR A WORKERS' RECOVERY PLAN!

The recovery plan must put people first. Putting forward a workers' recovery plan becomes our job, Labour's job, in coalition with existing and potential allies and community allies already engaged in fighting the crisis. To implement this recovery program, Labour will need to mobilize union members and their organisations.

We face a once-in-a-lifetime economic crisis that threatens the very foundations of our economic well-being. The crisis threatens the well-being of America's working people and their families.

As this crisis shakes the base of the financial system, it has exposed the dangers of deregulation, it has exposed the blatant corruption of corporate domination of government, and it has exposed the fallacies of "free market" and "free trade." But it has also opened the way to push the government to promote a massive response on behalf of working people. It is both an opportunity and a requirement that we act immediately to stabilize workers and their families and that we redirect our economic system in a more economically just and environmentally sustainable direction.

The same corporate and banking elite that deliberately deregulated and manipulated our economy in pursuit of ever-bigger profits and larger markets are working hard to keep their prerogatives intact. The elite corporate-dominated economy is in deep recession, and in danger of taking the entire working class into a depression.

Organised labour, in our view, must take the lead and must promote aggressively demands for policies that would reverse our government's pro-business biases and steer policy toward dramatic improvement for the  British workforce.

No Corporate Bailouts: We must make a two-fold demand to the House of Commons: (1) track all tax £ pounds given out, to whom and for what, and (2) recapture by whatever means what was not used properly.

The City of London and the High Street cannot both be bailed out at the same time, because the City of London is about profiting from speculation, and the bailout is about funding the speculation.

Support the Public Sector: Massive central government  assistance must immediately go to the regions and councils to maintain employment, health, and education, as well as services and ongoing projects.

Housing Security: Access to affordable housing and access to reasonable loans must be stabilised.

Health Care for All: There must be an end to the privatisation of the NHS.

Reverse the tax cuts for the rich: There is no justification for giving public money to the rich. Instead the highest income earners and the corporations should be taxed at a much higher rate. Retroactively tax Windfall Revenue on the oil-energy industry, on executive compensation and on corporate foreign retained earnings. Roll back capital income taxation to 1981 levels. Repatriate an estimated
£50bn from offshore tax havens.

Fund Human Needs, Not War: The UK support for American imperialist wars around the world are draining the lifeblood from our public sector and leaving working class families with unbearable difficulties and impossible debt for many years to come. The current war expenditures are now estimated at more than £5 bn in ultimate costs. This cannot be sustained.

Organised Labour must actively oppose these wars and the costly war budget and strongly urge the transformation of large sectors of the military-industrial economy into job retraining for a sustainable domestic and green economy. Labour must aggressively act to stabilise and advance the domestic economy and the interests of the British people.

What Nationalisation is Not

At a cost of nearly £20,000 per taxpayer, with little or nothing to date to show for it, it is time for practical proposals to nationalise the banking system. It is time to transfer the billions paid and/or allocated for bank bailouts toward bailing out British working and middle class families.

Whether from the City of London, newspaper  editorialists and  columnists, former Bank of England chairmen, or Nobel laureate economic professors, proposals that have been called 'bank nationalisation' to date have all been little more than schemas and facades for funding bank bailouts.  Some call proposals for the U.K. government to buy preferred stock in failing banks 'bank nationalisation'. Others call buying bank common stock, or purchasing some combination of convertible preferred-common stock, bank nationalisation.

Stock purchases in its various forms and whatever formal legal ownership that may confer, do not constitute 'bank nationalisation'.

Other proposals since the onset of the Banking Panic of October 2008 include government purchasing bank bad assets and depositing those toxic securities in a separate so-called government run 'Aggregator Bank'. Or having the  Bank of England  buy up a failed bank's remaining assets then reselling the cleaned up bank back to its original investors at fire sale prices.  Or other variations by which the government may assume 'temporary trusteeship' of a bank, re-privatise, and resell the restored institution at taxpayer expense.

But Government purchase and removal of bad assets from banks at taxpayer expense do not constitute bank nationalisation.

Nationalisation is not about who owns but about who benefits, about who makes the strategic decisions, and on behalf of whose interests those decisions are made. Nationalisation is not about ownership but about control.

Essential Elements of Nationalisation

Nationalisation is not about who is legal owner but who controls bank decision making and on behalf of whose interests that control is exercised--i.e. on behalf of the nation and its majority, the working and middle class British families, or the investors and management of the banks who, in pursuit of unmitigated individual greed, have driven those institutions into the ground.

Control is not exercised or achieved via mere inspection or oversight of existing bank management decisions.  Control is not a consequence of management reporting. Nor is it a result of government vetoing of management decisions.  Control is government representatives directly making all strategic decisions, as well as a range of important operational decisions. Nationalisation means the removal of bank senior management and boards of directors and their replacement with management directly accountable to government and with boards of directors representative of labour, community, and the broader public.

Nationalisation means control on behalf of the public interest, not private interests.  Nationalisation means removal of the private profit motive and its replacement with a national service motive.

Britain  needs a new kind of banking system.  Banks should function as utilities in the service of the nation and its people. Not as profit driven institutions.   It is time to begin fundamentally transforming that system, in a series of phased stages of nationalisation.

Some Immediate Practical Steps Toward Bank Nationalisation

Initial, immediate steps toward the full nationalisation of the banking system and its eventual transformation into a national non-profit utility, should include the following:

1. Homeowners' facing delinquency, default or foreclosure should have their mortgage principal payments reset to 2002-03 levels. And mortgage interest rates reset to current 30 year UK Treasury bond rates of 2.5%. All new mortgages issued should be similarly indexed not to exceed UK Treasury bond rates.  If banks can now borrow from the  Bank of England  today at 0.25% rates, why shouldn't homeowners be able to do so directly for 2.5%?   To administer the new, nationalised residential mortgage market, a new agency based around mutual / co-operative principles should be established.

2. Nationalisation of the banking system should also immediately extend to all consumer credit markets.  All vehicle, student, and related consumer credit loans should be financed directly through the  Bank of England, operating as 'lender of primary resort', with loan servicing provided by local credit unions and consumer loan interest rates indexed to the Bank of England's Discount Rate, at which banks are now permitted to borrow directly from the Bank of England.

3. Nationalisation should thereafter immediately extend similarly to the small business property markets, providing property financing for businesses employing 50 or fewer employees.

4.  No private banking interests should be permitted to serve on or lobby the Bank of England.

5. The Bank of England should have authority to regulate all credit card rates and terms, index credit card rates to appropriate short term interest rates, and establish a ceiling rate of no more than 7% on any credit card.

6. Permanent and impermeable regulatory firewalls should be set up, insulating residential and small business mortgage markets, consumer credit markets, and other credit sectors of direct import to consumers and the general public from the remaining still privatized sectors of the banking industry.

Once having achieved the above initial, immediate steps nationalising those sectors of the banking industry having had the greatest negative impact upon British working families, further sectors of the banking industry should be prioritised and plans developed for the eventual nationalisation and conversion of banking into a national utility, operated without profit, and managed on behalf of the needs of the nation and the majority of its populace.