City Socialists at the Fabian Society

By Dan McCurry

Sometimes you get the impression that the Parliamentary Labour Party is composed entirely of public sector types. Sometimes you get the impression that these public sector types never speak to anyone else except other public sector types. Occasionally you get to see the private sector confront them and give them a good dressing down. That’s very much what happened in this Fabian event after the Labour contingent on the panel managed to completely antagonise the audience.

I was filming the event with a view of posting it on my blog and for the first half of the event I regretted being there as it was a bit boring. John McFall condemned the bankers and condemned their pay, which was hardly new since his committee had been televised dozens of times since they gave the bankers a piece of their mind all those months ago. A political party works at its best when the parliamentary party is kept in check by the grassroots membership, but this grassroots confrontation was unexpected, since nearly all the Fabian members present were themselves bankers.

Their frustration was due to the failure of the Labour party to recognise that although the downturn is still severe, the financial crisis itself has passed. Banks are rebuilding their capital and the stock market is recognising this with alacrity, with Barclay’s shares having increased by 550% since January. Meanwhile in Europe, the French and Germans are pressing for financial regulations which many suspect to be motivated more by a desire to undermine British political power than by genuine economic principle. The City fears they are without representation.

If we continue to abuse the City, we give the agenda to those who wish to undermine us. Few in the City believe that Private Equity is a sound business model, far from it. No good can come from shadowy financiers removing companies from the stock market simply in order to saddle them with debt which is then used to finance the removal of more companies from public listing. This is nothing more than a long-term danger to the system. But the French and Germans wish to use this issue in order to legislate against the City in much wider attack.

We must regain the trust of the City if we are to be able to confront the ethical and economic dilemmas that Private Equity presents. For the Labour Party to be so busy condemning bankers that they allow France and Germany to create new laws that will undermine London and push finance off-shore and away from all accountability, is surely a mistake.

Some Labour people think that the City is a fundamentally right-wing institution that funds the Fabians for PR purposes, but the fact is that if Gordon Brown was not a politician he’d probably be the head of Goldman Sacks right now. These bankers are valuable Labour supporters and their message is clear. The direction of the wind has changed and the Labour party has so far failed to notice. However, the party has been given a chance to recognise this change of wind before any real damage is done.

The Fabian Society provides a home for socialists of the City and it is these City socialists who wish to mark a new chapter to the Credit Crisis by calling for an end to the condemnation of bankers, and the beginning of a new future of prosperity for our society. John McFall should listen to these grass-roots Labour voters, and so should the rest of the Labour Party.

Dan McCurry also blogs at The Sunday Blog.