Sunday, September 21, 2008

Why we need a Capital Stewardship forum in the Labour Party.

Okay, I ’m not going to argue that the only reason for our present day global economic crisis is down to there being no forum for Capital stewardship in the Labour Party.

But... I am pretty sure that it didn’t help and its absence won’t help stop or mitigate the next inevitable financial scandal.

Our collective failure to take responsibility for our own money is a glaring modern day political and social failure. How many of you can say, hand on heart, that your pension or insurance company did not lend hedge funds and speculators your shares in order for them to destroy the value of your other fund investments in the banking sector?

I am certain also that you were fully aware and informed that your investment manager was using your money to buy American sub-prime mortgage bonds? And that these bonds had been certified as being “safe and secure” investments by credit reference companies... who had actually been paid by the same sub-prime bond providers to say so?

Finally, I have no doubt that your approval was sought to pay individuals huge amounts of your savings to gamble huge amounts of said savings, purely on short term market trends and that nobody, repeat nobody, really cared whatsoever what will happen to you - the long term saver. The real Golden Calf of financial services.

Please note that I haven’t mentioned so far that we should as a matter of course make sure that the companies our savings are invested in do not allow child labour, do not deliberately destroy the environment and just maybe, maybe they recognise that it’s a good idea to treat their workforce decently and not harm them.

Ordinary British people legally own British and international companies via our pensions, insurance policies, PEPS, ISA, privatisation shares, unit trusts, investment trusts and individual share holdings. With ownership there comes responsibility as well as financial rights of return. If you do not exercise your rights of ownership in the companies that you own, then you run the danger that the people who you employ to exercise these ownership rights, run the company to benefit their short term aims (i.e. massive bonuses) not the interests of its real owners (you - the mug).

The UNISON website on Capital Stewardship notes that “it is estimated that occupational pension schemes and small savers "own" more than 50% of stock in the world's major companies”. If people like us own these companies how come we have so little influence over the way they behave?

A number of us who are interested in this issue and are members of the Party have been kicking this issue around for the last year or so. Our idea is that there should be a forum within the Party to discuss capital stewardship issues.

Our broad objectives are -
To develop a proper understanding of the UK financial system and capital markets within the labour movement
To contribute to the development of coherent policy objectives, within both the Labour Party and affiliated organisations
To act as a resource for elected representatives and officials with responsibility for the stewardship of capital

I have spoken at a number of local Labour Party meetings and with senior figures in the Party that I have managed to badger about such a forum. So far I have not had any really negative comeback. Others have taken it further and it would appear that many in the Party are genuinely interested in participating in such a forum.

I moved this motion (below) at a recent UNISON regional Labour Link meeting and we will be discussing it at my GC next week (supported by wards and other affiliates).

If anyone wants anyone to speak at your GC on this issue then please l let me know (London only so far). If you agree with its sentiments then send it in to your trade union branch or ward/CLP.

This conference notes that London is the home of British and international financial services. Billions and billions of pounds of investments are traded here daily. Much of this money is invested in company stocks and shares.

While much of the ownership of the UK’s public companies ultimately lies in the hands of small British investors and ordinary workers who belong to pension or insurance schemes. This is not only just their savings for retirement which must be safeguarded, but also such investors are increasingly concerned that their money is properly invested in accordance to modern good investment practices.

For example they want to ensure that the companies they own do not use contractors who employ child labour, do not pay excessive salaries to executives and do not cause damage the environment. Well managed companies with good governance practices should also produce superior investment returns in the long run. This is called Capital Stewardship.

In the Labour Party there is currently no forum to discuss and debate Capital Stewardship issues. This conference resolves to encourage London affiliated trade unions, socialist societies and CLPs to support and encourage the establishment of a national Labour Party forum based in London to progress Capital Stewardship and good investment governance initiatives.


Anonymous said...

I think it would be nice just to have a Labour party.

Anonymous said...

I thought the Labour Party were bankrupt and Brown "no more boom nor bust" is presiding over one of the biggest financial booms followed by a bust of the modern era? For such an economically inept Party I'm surprsied you would think anyone at all was interested in your views on Capital? Why is it that Labour... who are so crap with economics and money feel they are qualified to lecture anyone about the economy? If I want advice on an ilnness I don't go and see the Doctor who has failed to cure the most people for a diagnosis? Labour - experts at everything.

John Gray said...

Hi Anon 1
We do! Stop moaning, if you believe in a Parliamentary democracy get stuck in and fight your corner.

John Gray said...

Hi Anon 2
Not of course that I agree with you that “analysis” (hmmmm) but I would have thought you would have welcomed a forum within the Labour party to inform and educate people? There should be one within the Tories or Lib Dems as well to be honest.

I must admit that I find your comments quite amusing at this time. Have you no self awareness at all? This morning I heard that the Church of England believes that the old rogue Marx, himself was right! (Over some things).

Many (not all of course) in the super capitalist markets are now widely seen to be nothing better than common thieves and fraudsters.

We have the spectacle of once proud “free market” Banks and insurance falling over themselves to beg the once hatred state to fill their bowls with taxpayers money (or credits).

Now, I believe strongly in a properly regulated mixed economy managed to maximise social justice.

You are yesterday’s man – our time has come “Komard” (better late than ever)