The “dog’s breakfast” that is City regulation

Mervyn King spends "more time..... talking about tennis" than about finance.

Labour peers have rounded on the government this week over its Financial Services Bill, which will overhaul the way the City is regulated.

Opposition spokesman Lord Eatwell attacked the Bill as a “dog’s breakfast” which failed the  four tests of “accountability, clarity, efficiency and transparency."

The Bill was receiving its second reading in the House of Lords yesterday. Lord Eatwell said that “instead of drafting a new template for the financial services industry” the government had constructed a “dog’s breakfast of amendments to earlier legislation”.

He promised to press for improvements to be made to the Bill, which he said was "flawed."

Former City minister Lord Myners joined the criticism, claiming Bank chief Mervyn King spent more time in board meetings talking about tennis “than about issues of financial stability”.

However, Lord Sassoon, Treasury minister, defended the Bill, saying that the current system had failed because “no one had the single responsibility to monitor the financial system”. The new legislation would put power firmly with the Bank of England, he said.

The Bill, which has completed its Commons stages, was carried over from the previous parliamentary session. It tears up the tripartite system of regulation where powers is shared between the Treasury, the Bank and the Financial Standards Authority.

Instead, a new Financial Policy Committee (FPC) within the Bank of England, will be tasked with monitoring systemic risks, while the Bill also creates a Prudential Regulation Authority (PRA) as a subsidiary of the Bank of England, and a Financial Conduct Authority (FCA) covering consumer protection.

Yesterday, it was announced that the outgoing chairman of KPMG, John Griffith-Jones, has been appointed as the first non-executive chair designate of the FCA.

Helen Roxburgh is the online editor of Economia

Mervyn King, Photograph: Getty Images

Helen Roxburgh is the online editor of Economia

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Our union backed Brexit, but that doesn't mean scrapping freedom of movement

We can only improve the lives of our members, like those planning stike action at McDonalds, through solidarity.

The campaign to defend and extend free movement – highlighted by the launch of the Labour Campaign for Free Movement this month – is being seen in some circles as a back door strategy to re-run the EU referendum. If that was truly the case, then I don't think Unions like mine (the BFAWU) would be involved, especially as we campaigned to leave the EU ourselves.

In stark contrast to the rhetoric used by many sections of the Leave campaign, our argument wasn’t driven by fear and paranoia about migrant workers. A good number of the BFAWU’s membership is made up of workers not just from the EU, but from all corners of the world. They make a positive contribution to the industry that we represent. These people make a far larger and important contribution to our society and our communities than the wealthy Brexiteers, who sought to do nothing other than de-humanise them, cheered along by a rabid, right-wing press. 

Those who are calling for end to freedom of movement fail to realise that it’s people, rather than land and borders that makes the world we live in. Division works only in the interest of those that want to hold power, control, influence and wealth. Unfortunately, despite a rich history in terms of where division leads us, a good chunk of the UK population still falls for it. We believe that those who live and work here or in other countries should have their skills recognised and enjoy the same rights as those born in that country, including the democratic right to vote. 

Workers born outside of the UK contribute more than £328 million to the UK economy every day. Our NHS depends on their labour in order to keep it running; the leisure and hospitality industries depend on them in order to function; the food industry (including farming to a degree) is often propped up by their work.

The real architects of our misery and hardship reside in Westminster. It is they who introduced legislation designed to allow bosses to act with impunity and pay poverty wages. The only way we can really improve our lives is not as some would have you believe, by blaming other poor workers from other countries, it is through standing together in solidarity. By organising and combining that we become stronger as our fabulous members are showing through their decision to ballot for strike action in McDonalds.

Our members in McDonalds are both born in the UK and outside the UK, and where the bosses have separated groups of workers by pitting certain nationalities against each other, the workers organised have stood together and fought to win change for all, even organising themed social events to welcome each other in the face of the bosses ‘attempts to create divisions in the workplace.

Our union has held the long term view that we should have a planned economy with an ability to own and control the means of production. Our members saw the EU as a gravy train, working in the interests of wealthy elites and industrial scale tax avoidance. They felt that leaving the EU would give the UK the best opportunity to renationalise our key industries and begin a programme of manufacturing on a scale that would allow us to be self-sufficient and independent while enjoying solid trading relationships with other countries. Obviously, a key component in terms of facilitating this is continued freedom of movement.

Many of our members come from communities that voted to leave the EU. They are a reflection of real life that the movers and shakers in both the Leave and Remain campaigns took for granted. We weren’t surprised by the outcome of the EU referendum; after decades of politicians heaping blame on the EU for everything from the shape of fruit to personal hardship, what else could we possibly expect? However, we cannot allow migrant labour to remain as a political football to give succour to the prejudices of the uninformed. Given the same rights and freedoms as UK citizens, foreign workers have the ability to ensure that the UK actually makes a success of Brexit, one that benefits the many, rather than the few.

Ian Hodon is President of the Bakers and Allied Food Workers Union and founding signatory of the Labour Campaign for Free Movement.