Brendan BarberBrendan Barber, General Secretary of Britain’s Trades Union Congress, criticised the short-term, “quick buck” mentality of hedge fund managers and called for fundamental change in the core values of banking with an emphasis on “public interest”.

Speaking in London, Mr Barber said there needed to be greater financial regulation, stimulus measures to offset the recession, and “active labour market measures to minimise unemployment.” UK unemployment was running at 2.5 million, including one million unemployed young people under the age of 25. “Previous recessions have shown the long-term social problems if young people at the start of their working lives are denied opportunities to gain a foothold in work. We welcome government initiatives, such as Future Jobs and other government responses, to guarantee work for the young unemployed.”

With the recovery still very fragile, the priority now was to stimulate the recovery rather than cut the borrowing deficit, he said, in an implied support of the Labour Party’s proposals to increase national insurance contributions. He called for a new set of values in banking and financial services to avoid a “double dip” in the economy.

He was speaking on “a trade union perspective on the banking and financial crisis”, at a forum held in the London centre of Initiatives of Change on 27 April. It was organised by The Industrial Pioneer and Caux Initiatives for Business.

Mr Barber gave Prime Minister Gordon Brown “serious credit” for the government’s decisive action to stabilise the financial system, “including taking Royal Bank of Scotland and Lloyds-HBOS into effective public ownership”, following the collapse of Northern Rock in 2007, bailed out by the government, and Lehman Brothers in the USA in September 2008. Mr Brown had helped to marshal global efforts at G20 summits and forged an active agenda “recognising that what started as a financial crisis was going to become an economic and employment crisis,” Mr Barber said.

Following the part nationalisations of UK banks, the government-owned UK Financial Investments Ltd had been set up to manage the banks’ shares. The TUC, he said, had also encouraged institutional investors, including pension fund managers, to take their share ownership role seriously and participate as shareholders. Barber said he had argued the case for the body to have representation from wider civil society but this hadn’t happen. This, he said, had been “a missed opportunity to have more explicit public interest representation, to ask the important questions on public interest issues on the way some financial institutions are run.” 

In support of environmental policies, Mr Barber said that the economy was far too reliant on financial services and that there needed to be a “rebalance” towards an “active industrial policy towards a low carbon future”. He called for “real sustainability” in a future economy, “not just environmentally but supporting industries that would generate genuine, long-term wealth creation”, including “green jobs” that would support the move to a low carbon economy. 

Challenges that the TUC needed to address, he said, included “vulnerable employment”--those in acutely vulnerable jobs who often suffer the biggest abuses in pay and conditions. "For those whose immigration status is questionable, for example, they are at the mercy of ruthless, exploitative employers." New laws are due to come into effect in 2011 to protect agency workers, one of the most unprotected sectors of the UK workforce, he said.

The TUC represents 6.3 million workers in 59 trade unions. Mr Barber referred his audience to the independent, cross-party Future of Banking Commission, sponsored by the Consumer Association, which is looking into the public interests of banking. http://commission.bnbb.org/banking/

Additional reporting by Esme McAvoy