The BNP argues that financial regulation should be massively increased, that we should “shut down the city” and in the process rid the country of the ““Financial services” … parasites that generate no real wealth.”
The City has never been less popular in modern Britain, but the BNP’s populism ignores the massive hole that would be blown in the British economy from losing the banks altogether. In a typical year financial services contributes around 7.5-10.8% of GDP in Britain, paying £67.8 bn in taxes in the financial year ending 31 March 2007 alone, 13.9% of the UK total. That’s just over a £1,000 each.
These figures of course pre-date the current economic crisis and we have recently learnt that, no, we haven’t quite ended booms and busts. Financial bubbles will probably always be will with us, and we still have not yet solved difficult questions about balancing innovation, risk and moral hazard.
However, that doesn’t mean we should shut down the City altogether. It is increasingly clear that the vast majority of the money lent to the banks will be paid back. This isn’t the first financial bubble we’ve been through, and in the long term our economy has always rebounded. Much of the UK’s current fiscal difficulties come precisely because in the past we enjoyed so much tax revenue from the financial services. Without that money, our whole economy suffers.
The BNP’s policies would hit the city in multiple ways. Not only would there be a massive increase in regulation, but their immigration policies would expel all foreign bankers and their nationalistic policies close down foreign capital inflows.
Finance is a highly mobile industry. Companies that have chosen to locate here could just as easily switch to Geneva or Singapore. In an economy where companies can no longer innovate, hire the best workers and suffer under an atmosphere of hate that thinks of them as little more than ‘parasites’, there seems little reason to stick around.
The consequences of that wouldn’t just hurt rich bankers, but hit the rest of us just as hard. Everything that the city’s money had paid for, whether it be our taxes and public services, the jobs they’d funded or our charities that they’d supported would find themselves short of cash.
Long before the financial crisis, extremist ultra-nationalists were enemies of the City. Partly this is as they see international capital flows as a threat to national independence. But part of it also comes from a more worrying anti-Semitism, which sees global capitalism as some mass Jewish conspiracy. In the 1930s, the attack was often on the Jewish capitalist. Today, the BNP uses what it calls ‘banksters’ rather than “Jewish financial capitalism” as their chosen scapegoat, but much of the rhetoric remains little different.
Neither has the anti-Semitism strain completely disappeared from European fascism. In October 2008 at Jobbik’s commemoration ceremony attended by Simon Darby, Roberto Fiori, a long term ally and close personal friend of Nick Griffin, in a speech, attacking free markets and usury claimed:
“This is the same capitalism that is pushing thousands and millions towards poverty. But it is lead from the same people who put Christ on the cross!”
We are currently seeing the results of what happens to our economy when our financial services are in trouble. The BNP’s reactionary anti city policies would ensure this remains a permanent condition.
