Nothing could point more clearly to the parasitic nature of the banking system than the relationship between the profits of the big banks and economic growth. In one of our earliest issues (Vol. 1, No. 3) we noted that in 1963—a year of expansion—bank profits were down: Westminster and Lloyds by 6% and National Provincial by 2%. During most of 1964 there was no economic expansion. The banks accordingly increased their profits; Westminster, £1,150,000 up; Barclays, £1,908,000 up; Lloyds, £969,000 up; Midland, £1,200,000 up; and National Provincial, £580,000 up.
This is clearly a concern for the Labour Government and the Labour movement in general. We have just gone through a crisis of confidence in the pound. Economic steps have been taken by the Government which will hold back economic expansion and increase the profits of banks. Is this what the tens of thousands activists in the Labour movement fought the election for? So that next year the big five will announce similar increases?
If banking interests can only thrive on economic stagnation then definitely there is something basically wrong. ~Labour’s economic plans must be shaped to weaken and destroy the grip of the City and the banks on the economy. Instead of kow-towing to these interests Labour should be tough with them.
There is, too, an immediate policy question: the Steel Nationalisation Bill is at present being drafted. If this is drafted in such a way that the industry is starved of capital and is compelled to go with its begging bowl to the money market the grip of the banks on the economy will be immediately strengthened.