‘The financial sector exploits an astonishing political privilege: the City of London is the only jurisdiction in the UK not fully subject to the authority of parliament.’ Illustration: Sébastian Thibault
Be reasonable in response to the unreasonable: this is what voters in the Labour election are told. Accommodate, moderate, triangulate, for the alternative is to isolate yourself from reality.
You might be inclined to agree. If so, please take a look at the reality to which you must submit. To an extent unknown since before the first world war, economic relations in this country are becoming set in stone. It is not just that the very rich no longer fall while the very poor no longer rise. It’s that the system itself is protected from risk. Through bailouts, quantitative easing and delays in interest-rate rises, speculative investment has been so well cushioned that – as the Guardian economics editor, Larry Elliott, puts it – financial markets are “one of the last bastions of socialism left on Earth”.
Public services, infrastructure, the very fabric of the nation: these too are being converted into risk-free investments. Social cleansing is transforming central London into an exclusive economic zone for property speculation. From a dozen directions, government policy converges on this objective.
The benefits cap and the bedroom tax drive the poor out of their homes. Theforced sale of high-value council houses creates a new asset pool. An uncapped and scarcely regulated private rental market turns these assets into gold. The freeze on council-tax banding since 1991, the lifting of the inheritance tax threshold, and £14bn a year in tax breaks for private landlords all help to guarantee stupendous returns.
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