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Year 2009 No. 73, December 1, 2009 ARCHIVE HOME JBBOOKS SUBSCRIBE

"Emergency Liquidity": Government in the Service of the Financial Oligarchy

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"Emergency Liquidity": Government in the Service of the Financial Oligarchy

The Continuing and Positive Legacy of the Vestas Workers’ Struggle

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"Emergency Liquidity": Government in the Service of the Financial Oligarchy

The Governor of the Bank of England, Mervyn King, appeared before the Treasury Select Committee on November 24, and for the first time revealed details of the size of emergency loans to the Royal Bank of Scotland and HBOS last year. His remarks were confirmed by Chancellor Alistair Darling the following day in a statement to the House of Commons. “As the Governor said, from 1 October 2008 the Bank provided liquidity to HBOS, and from 7 October to RBS. Use of the facilities peaked at £36.6 billion for RBS on 17 October and £25.4 billion for HBOS on 13 November. The total use of emergency liquidity assistance across both banks peaked at £61.6 billion on 17 October. At that point, the two banks concerned provided the Bank with collateral-including residential mortgages, Government debt and personal and commercial loans-totalling in excess of £100 billion.

The major banks want to be able to take risks, without being liable for the consequences if the risks fail and reap the rewards when their number comes up. And they wish to maintain the confidence of the financial speculators and institutions, irrespective of the outcomes of their decisions, so that they can maintain the inflow of the funds needed for their high risk strategies. In the language of finance capital, their debts are their assets, and the return on their assets depends on the willingness and ability of whosoever or whatsoever they are indebted to back that debt.

Of course, all this came tumbling down with the collapse of the financial system, whatever the element of conscious planning by the biggest players to bring about this collapse, in order to consolidate the stranglehold of the most powerful, to ensure billions were channelled their way by governments and institutions and lenders of last resort.

The extent of the practically endless supply of funds from the state and its financial power is still being revealed. The pretexts and excuses from the government also continue to flow. The billions upon billions which have found their way into coffers of the owners of capital the Chancellor swears have been put there so that the market can function, so that the wheels of the economy can remain oiled and the whole system with its hidden hand avoid seizing up completely. The state is now the majority shareholder in RBS and HBOS, but this does not change the underlying reality that the underlying mechanism is one of billions of pounds, whether in loans or in other forms of the bailouts to “recapitalise the banking system”, straightforwardly being channelled from the state treasury to the financial oligarchy.

This is one of the biggest indictments of the capitalist system itself. But rather than admit this glaring fact, Gordon Brown and his Chancellor view everything and explain everything from a wholly capital-centred viewpoint, as though human beings cannot conceive of taking control of the economy and utilising it for the benefit of society, its individuals and collectives. Naturally, the various owners of capital differ in their interests and their responsibilities or lack of them, and contradictions abound. But they are united in that the claims of the rich on the state treasury are paramount, and that all else must pale into insignificance in comparison. The virtual printing presses are also working overtime to purchase government debt, which goes to bolster the value of capital in the hands of the banks. So complete is this state of affairs that the government cannot or is not prepared to attract manufacturing monopolies with loans or handouts, because its terms are not “attractive enough” as so much real and virtual wealth is being siphoned off to the banks in the name of solving their problems of “liquidity”, i.e. funds they are prepared to lend. But even in the Chancellor’s own terms, this problem of “liquidity” is not disappearing. The state treasury is put totally at the disposal of the financial oligarchy. In this situation, it is no wonder that the cartel of parties at Westminster are focused on the government deficit and squabbling amongst themselves ineffectually as to its size and importance. Meanwhile, forces such as the TUC are chipping in to say that the deficit is not the problem, but the symptom, and the government should not shrink from continuing to oil the wheels of finance capital.

It is true that the deficit is a symptom of the underlying problem, the financial and economic crisis, but ignoring what has caused this crisis is not going to provide solutions. The Chancellor in his statement to the House of Commons on November 5 regarding the hidden “emergency liquidity assistance provided by the Bank of England to the banking system” paints a panic-stricken picture: “the world banking system was on the verge of collapse”. The remedy had to be “maintaining financial stability” in these “extraordinary market conditions” by ensuring that “the banking system” had “access to sufficient liquidity”. This “remedy” is ensuring rather than the social economy is being starved of real investment of material value, and that the crisis may be temporarily alleviated but that its underlying severity and profundity is being chronically intensified. The Chancellor is so very deeply concerned for the survival of the “banking system”, but it is noticeable how this concern comes at the very top of his list, on which everything else is supposed to depend, and his avowed concern for a national economy that serves the peoples needs and provides a modern standard of living and guarantees a livelihood is very hard to find.

The Chancellor does not explain what is the use of a banking system if its function is to endlessly circulate funds, while the banks and the financiers take their cut at every stage. Reference to social production, the source of the wealth needed to fund the state treasury, is noticeable by its absence from Alistair Darling’s statement. Instead, the Bank of England becomes a mysterious source of wealth that can conjure up funding literally from nothing. The working class and people cannot be fooled by such chicanery. The bottom line is that the government is stealing added-value from the social economy to pay the financial oligarchy.

The Bank of England has been one of the greatest financial instruments of exploiting the working class and the people, both nationally and internationally, ever since its institution in 1694. It has been the central financial institution of the state, run by the financial oligarchy, in the building up of the capitalist system. It was nationalised in 1946, and New Labour under Tony Blair declared it to be an independent public organisation in 1997, but it remains an instrument of the government, designed to serve the private ownership of the means of production, designed to serve the financial oligarchy. It is playing a gigantic criminal role in the present financial crisis, fleecing the wealth of the socialised economy to pay the rich and to ensure that their system maintains its stranglehold.

The working class and people must reject the self-serving propaganda of Alistair Darling and Mervyn King and the other apologists for finance capital that the government’s function is to prop up the financial oligarchy. The working class is capable of bringing forward its own worker politicians who will take a stand on restricting monopoly right and put the claims of the people and the needs of society before the rapacious demands of the financial oligarchy and build a self-reliant social economy.

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The Continuing and Positive Legacy of the Vestas Workers’ Struggle

From the Savevestas Blog

Going Out in Style

You might think that the eviction on Friday, November 27, of the “magic roundabout” Vestas camp, Newport, Isle of Wight, would be a sombre occasion but it was anything but. We have a lot to celebrate, even if the owners have got a court order to have the camp removed. The camp has been a mainstay of the campaign by Vestas workers for their jobs, and a place where valuable lessons in campaigning, politics and camaraderie have been gained.

[The following was written before the county court granted the repossession order to the landlords, Hanslips – Ed.]

The Magic Roundabout has been alive four months now: a continuous show of solidarity with the spirit of working-class direct action that brought it into life. It started with people wanting to maintain a constant presence in support of the group of workers who had gone out on a limb and taken the rare and bold step of occupying the offices of the management of Vestas Blades UK. This, to protest against the unilateral closure of the biggest private employer in an area of high unemployment, in a time of recession. This, a factory that had been producing blades for wind turbines on a would-be “eco-island” in an era of man-made catastrophic climate change. The campaign website was named Save Vestas, and the accompanying slogans, Save Jobs, Save the Planet.

The campaign and its aims have been supported by thousands of people around the world. The Roundabout was the focus of local support with daily meetings and rallies and a continual hub of campaign activity. From the outset, a gazebo was erected as a kitchen, a donation from the local branch of the Fire Brigades Union and the workers finally unionised by the local RMT branch. Since then, it has survived and thrived through the presence of committed people, the donation of food, tools, materials and funds from individuals, union branches and campaign groups. Its presence has been key to keeping the issues of unemployment and climate change high on the political agenda, locally and nationally.

The campaign holds regular educational events and protests and outreach work to bring ordinary people together to champion their right to socially useful work, with a union recognition and freedoms. For a month after the eviction of the occupation, there was daily leafleting of the remaining workforce with information and union forms. With “Vestas Blades” due to hand over to “Vestas Technology” and reopen next month in a limited form, Vestas are determined to reinstate their former regime where workers were treated with disregard and contempt, and remove union organisers from the scene. Likewise with Gurit management next door, who are expected to push on with a programme of redundancies that were stalled by the arrival of the camp and the unionisation drive that it initiated.

The documents filed to the courts include more or less identical submissions from Hanslip and the managing director of Vestas, Paddy Weir, who is unlikely to cash in on the £70,000 bonus he was granting himself for the smooth closure of the factory, until the protests die away. Indeed the statement by Paddy Weir is dated before that of the landlord himself and the photos of the camp submitted taken by staff employed by Vestas, suggesting strongly that the pressure for this repossession is a further desperate political move by the shamed company to be rid of a protest-site designated by the police under Section 14 of the Public Order Act.

The main grounds for repossession are that that our activities suggest that we have no intention of leaving the industrial estate anytime soon and that we are an ongoing nuisance to Vestas!

It is true that in the aftermath of the gales last week, we now have a new solid kitchen built by workers and local supporters recycling the wood from the palettes on the industrial estate and rain-proofing from previous structures. It is true that our main tent has survived this extreme weather and still hosts visitors to the campaign locally and nationally, including last months’ lunch event with Green MEP Caroline Lucas. They submit as evidence last Saturday’s successful “Push the Green Button” event in town, supported by local unions, that provided information, free soup and tea, and a straw bale forum to discuss Vestas, Climate Change, working-class political representation and jobs and services: the main issues for the ongoing campaign. It is also true, as a protest site, that we do intend to maintain pressure on Vestas, while they continue to deny the occupiers their redundancy. The RMT union is still appealing against their dismissal.

We are also accused of causing health and safety issues and access issues for Gurit, which is laughable after months of 24-hour operations at the site. The police visit or drive round daily and we have complied with the minor adjustments that have been required of us, removing a gaffer-tape smile face from a road traffic sign, and a small picnic table from the roadside.

Our favourite allegation is that we are deterring prospective employers from setting up on the industrial estate! Ours is a campaign for job creation, for the opening of the factory at the St Cross Business Park. We shall have little reason to camp on a roundabout when the factory is reopened with indoor union facilities. Apart form this, it is ironic that Hanslip can make this claim. Many of the buildings on the industrial estate have stood empty for years since they were built. The mock-facade of a construction site on the wasteground adjacent to the Vestas site was designed to spur Vestas into securing a freehold on the site before another company – this failed.

The campaign has been trawling through the opaque evaluations of the whole development of the industrial estate, which more or less confirm what local people knew, that millions of public money have been thrown away to the Hanslips and Vestas, regeneration money that should have guaranteed long-term skilled employment opportunities on the island. The subsidy-chasing, socially irresponsible conduct of Vestas, and the lack of safeguard set-down by the Lib Dem council of the time and the regional development authorities, mean that the Isle of Wight has been set back more than a decade. The secretary of the Newport Trades Council is in the process of meeting the current council leaders to put to them a report detailing the loss of thousands of skilled jobs over the last 50 years.

A third statement by a Rachel Fiddler of HTP Training, further up the estate, parrots these allegations and makes the ridiculous assertion that we pose a risk to vulnerable young working-class people who come to their offices. A major achievement of the camp has been its accessibility. It has been a safe, welcoming and supportive place for all, with children’s days, and an open-door policy. We have provided food and tea to local homeless people and to company for those staying at the Seven Acres mental health facility.

Ours is a camp(aign) that is developing a grassroots vision for socially useful work, and a society more broadly that values care, cooperation, justice and dignity.

The move today to evict us, is nothing more than a cynical and dishonest attempt to remove from the scene a new and positive part of the moribund industrial estate, which until the protests began were a symbol of the failure of the powers that be to deliver.

Questions for discussion from last Saturday’s forums

1. Vestas
a. Vestas warned the workers that they would be sacked if they carried on the occupation. The occupiers resolved to continue, spurred on by overwhelming local and national support. Those that stayed were sacked with a letter hidden in a pizza box, and lost the redundancy money they were due. This amounts to about £45,000 for the 11 sacked workers. On both sides, this money is a matter of principle. Should Vestas back down and pay up?
b. Do you think the renewables industry should be taken under public ownership, run by the workers?
c. How did you feel about the Vestas campaign when it started, what do you think now, and where should it go from here?

2. Climate change
a. Do you trust that bosses and politicians will deal with climate change in a way that benefits ordinary people rather than their interests?
b. What do you think about the turbines going up on Cheverton Downs? Have you changed your mind since the Vestas campaign?
c. What can working-class people around the world do about climate change?

3. Working class political representation
a. Do you feel the Conservative MP and the Conservative-controlled council represent you?
b. The RMT union has started a campaign to stand candidates in the elections that will work for our interests and remain accountable to unions and working-class communities. Do we need this on the Isle of Wight?

4. Jobs and services
a. Do you feel that there are prospects locally for skilled, rewarding and well-paid work?
b. All over the country public services are being cut and privatised. Which services are most important to you? How can they be defended and improved?

(source: savevestas.wordpress.com)

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