C9 Reforming the financial and banking systems

Composite of motions 21 and 22

Congress welcomes the Government’s acknowledgement that the financial regime must be changed fundamentally in order to bring stability to the banking sector and ensure it can never again undermine the UK economy.

In particular, Congress believes that the Government must ensure that there is no return to the short-term return decision-making culture which did so much to precipitate the banking crisis. Congress notes that the White Paper, Reforming Financial Markets, presents plans to prevent further crises in the finance industry. However, Congress believes that we cannot simply maintain the risky business models and poor supervision of the past. There needs to be a more interventionist approach to regulation of this sector, including the rules which determine the remuneration structures of these institutions.

Congress welcomes the steps that the Government has taken to stabilise the UK banking system, recognising its collapse would have had an even more serious impact on the wider UK economy than has been seen since the banking crisis of Autumn 2008.

However, Congress believes that the Government – via UKFI, the body it set up to manage taxpayers’ stake in the banks – must play the role of an active investor if it is to protect the interests of UK domestic and business bank customers, more than 250,000 employees of the banks in which the Government has a stake, and the nation as a whole.

Congress recognises that thousands of finance workers are paying the price for the corporate greed, excess and recklessness of the City as they lose their jobs and pensions. Any suggestion that the taxpayer-supported institutions may be returned to the private sector with no consideration given to the impact on workers and their families would be a step in the wrong direction.

Congress further recognises that it was not the customers or the majority of the hard-working employees of Lloyds Banking Group who caused the banking crisis – it was the failings of regulators, investors and senior executives – and that the customers and staff should not have to pay the price for the failings of others.

Therefore Congress requests the General Council to support a call for the Government to use the taxpayers’ shareholdings in the bank to protect the interests of customers, shareholders, employees and the nation as a whole.

Congress calls on the General Council to campaign for:

i)        public interest representation on the board of the Financial Services Authority (FSA)

ii)      banks to have public interest representatives on their main boards

iii)    executive pay and bonus structures to be directly linked to sustainable and long-term performance

iv)    a clampdown on tax havens and offshore financial centres and a requirement for financial institutions to disclose the extent to which they use these jurisdictions.

Mover: Unite
Seconder: Accord