John McConnell Promises National Investment Bank and £500 Billion Credit for UK

Mike over at Vox Political has put up another piece today, which reports that Jeremy Corbyn’s deputy, John McConnell, has promised to set up a National Investment Bank, tied in with a network of regional banks, to regenerate Britain’s communities and revive Britain’s industries after years of neglect. The bank is based on the German Development Bank. In addition, he promised £500 billion of investment. This follows Owen Smith’s promise when launching his leadership campaign this week end, to introduce a British ‘New Deal’, and an investment programme of £200 billion.

See Mike’s article: http://voxpoliticalonline.com/2016/07/18/labour-pledges-national-investment-bank-to-mobilise-500bn/

Both McConnell and Smith are right about investment in British firms by the British state being sorely needed. But McConnell is absolutely correct about the necessity of a special British investment bank to channel the money and provide the necessary credit. It’s been needed for decades. The authors of the 1s987 book, Socialist Enterprise, noted that the British financial sector was structured into investing abroad, and recommended the creation of such a bank. Neil Kinnock, in his 1987 book, Making Our Way, recognised the need for it. G.D.H. Cole, in his book, Great Britain in the Post-War World, written as long ago as 1942, recommended a similar radical reform of the banking industry. That should tell you how desperately it’s needed, and why McConnell is right.

Han-Joon Chang, in his book, 23 Things They Don’t Tell You About Capitalism, argues in one of his chapters that it simply isn’t true that we are living in a post-industrial society. Britain still has a manufacturing industry, and it’s still immensely important. It only appears unimportant, because it hasn’t grown as much as the financial sector. It is, however, still of fundamentally vital importance to our economy.

All of this, of course, will be unwelcome news to the Tory party and New Labour. Both of these turned to subsidising and supporting the financial sector as an alternative to, and at the expensive of, manufacturing. One of the functionaries Blair appointed to the Bank of England was an American banker, Deanne Julius, who stated that Britain should give up manufacturing products and leave that to America. As for the Conservatives, half of their funding at the last election came from the City of London. They have no interest and absolutely no desire to aid a British manufacturing revival. Not if it means having to spend government money, rather than rely on a bail-out by a foreign firm.

Way back in the 1970s the late Tony Benn tried something similar. The government set up various zones, and schemes in which firms could receive government grants to renovate and modernise plant and equipment. I don’t think it was taken up, and British firms continued to lag behind their foreign competitors. And the result has been the decimation of British industry in the decades since Thatcher took power.

McConnell and Benn stand for British industry, and investment to create real jobs and economic growth. All Maggie Thatcher did was cut, and hope foreign firms would come in to invest in what was left. All the while favouring the financial sector and her friends in the City. It also shows the hollowness of the Tories’ claim to represent British industry. They don’t. Labour represents industry, and the people who work in it. The Tories simply represent capital and those, who own it. The very people, who seem to enjoy increased bonuses and share options by cutting down to the point of destroying the very firms they manage.

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