Wednesday, 8 October 2008

Union reactions to the bailout...

Responding to the rescue plan for UK banks, announcement today (Wednesday) by Chancellor Alistair Darling, TUC General Secretary Brendan Barber said:

'We welcome this bold package, but it is vital that the vast sums of taxpayers' money are used to change bank behaviour, not just bail them out. Fat cats must be put on a strict diet. They must start to lend to business again, and they must cut the cost of borrowing.

'Most importantly, the Government must make sure the banks can never gamble with peoples' livelihoods again. A very different banking system must emerge at the end of this.

'But more must now be done. The Chancellor must suspend the 'Golden Rule' on borrowing tonight to head off spending cuts, and must start to plug the gap by taxing those who have made millions from the asset bubble.

'And tomorrow the Bank must follow the Australian lead with deep cuts in interest rates of at least one per cent.'

Derek Simpson, Unite joint general secretary, said: "Unite welcomes the decisive action today by the government to inject capital into the markets. The union is demanding that this financial support is tied to clear commitments to secure vital jobs in the financial services' sector. This government finance must serve to make the industry more transparent and accountable.

"It is not acceptable for the government to socialise the risks taken and continue to capitalise the rewards in the finance industry. The measures announced today must be extended to include undertakings by the banks of no job losses, no repossessions of homes, and no rewards for irresponsible risk taking or failure.

"It is imperative that the financial measures announced today marks the turning point in the world of banking and finance. Workers in the financial services industry are not the culprits of the credit crunch and we are not prepared to allow them to become the victims. The taxpayer must now get a firm assurance that the financial lifeline extended to these large organisations will be used to protect jobs and the public."

Paul Kenny GMB General Secretary, who has been vocal since 2005 in criticising role of financial sector in the real economy, responded to the decision last night by the UK government to bail out UK banks. He said “The Government were right to bail out the UK banks as "there is no alternative" to taxpayer funding to keep the financial sector afloat. The old saying now applies with a vengeance” he who pays the piper calls the tune”. GMB members who are paying the piper want too see swift action to ensure that the bankers responsible for the crisis are held accountable and dealt with.

GMB members will want to see bankers’ heads roll. In particular Bob Diamond of Barclays should be sacked for his role in organising the £4.9billion loan to private equity in summer 2007 for elite, including Tim Parker, to walk away with £300m from AA sale. This was the last big deal done before the sub prime crisis hit. He is not the only one who should be sacked.

GMB members are not be prepared to see bankers get bonuses in 2008 paid for by taxpayers when public sector workers were denied an inflation level pay rise that across the entire public sector would have cost a mere additional £1.5 billion.

“Business as usual” is over for the City elite that organised this disaster. They will have to get used to living on normal incomes and paying their taxes now that the taxpayer is propping them up and calling the tune as result.”

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