United_Digital1_8:Activist issue 7 12/06/2009 13:24 Page 15
united digital finance in crisis
15
Who should run the UK
finance industry?
Unite wants to reform the financial sector, in the public – and staff’s – interest
In the first four months of 2009 Unite has seen mop up economic growth. In the 1980s/90s as commercial banks now only one remains –
almost 20,000 job losses in the finance sector. manufacturing industry declined and factories Airdrie Savings. But their business model
In May Unite warned firms that slashing their closed down a whole generation of workers should be replicated – like having the bank ran
staff will lead to a deeper crisis in the industry. were re-directed into the ever expanding by a group of trustees who don’t earn a penny
finance sector. “But, this time when these – they just work for the civic good.
The cuts have been savage. To date the cuts finance jobs go they’re gone, not to be
have included 1,200 jobs at Barclays, 1,900 at replaced. Where will the new jobs to replace On a larger scale Rob believes the
Merrill Lynch, 4,500 at Royal Bank of Scotland the ones we’ve lost come from?” asks Rob. Co-operative Bank, now a ‘supermutual’ could
and 1,200 at Royal Sun Alliance to name just be also be used as a model. When we do
four firms. “We believe it’s an indictment of the failure of come out of the recession will the big business
successive governments to support cartels continue as they did? Or are we going
Workers in banks and insurance companies manufacturing – which has been going on for to use this as an opportunity to change? Rob is
across the country continue to face uncertainty the last 30 years. We don’t have a national car quite clear on this. “What we can’t have is a
about their futures, as each week the trend to manufacturing company in this country, nor a new deal from the old gang. They cannot be the
slash jobs continues. single working dockyard that’s not architects of future banking.”
manufacturing anything other than defence-
Unite has done the maths and the formula is related products. When our jobs go, where will In fact the idea of mutuals and creating ‘people’s
simple. If the financial services industry cannot our members work? – it’s a real worry,” he banks’ is central to what Unite is doing to
maintain its greatest asset – their loyal adds. progress decent reforms of our financial
workforce – it will be seriously diminishing its system.
capacity to recover from the downturn. Another important part of the problem is the
fact that the last economic downturn was such Unite is working with institutions, academics
Unite’s finance sector leaders are angry at the a long time ago that now the banks have no and independent bodies to support diversity in
attitude of many firms. Unite national officer for generation of senior managers who know how financial services. Unite has commissioned a
the finance sector Rob MacGregor says, to manage a business in a recession. reform document, The financial inclusion centre –
“Unite is infuriated that banks and insurance which will be presented to MPs in June. Unite
companies are failing to recognise the damage Offshoring will also be discussing this at a fringe meeting at
that will be done to their businesses if they And amid all these problems it looks like firms this year’s Labour Party conference.
continue to simply slash thousands of staff each are still offshoring. Rob says, “The only thing
month. you can’t offshore is a branch where the Rob concludes, “If a private sector industry
branch is a brand anchor and the firm’s becomes too big to fail then it is too big. UK
“Nearly 20,000 job losses in the last four reputation would be at risk. But with tax payers are stumping up £900bn for the
months represents a significant loss in the technology changes and online banking, and if banking industry when our gross national
sector. The total number of workers across the you don’t care particularly where in the world product is £1.4 trillion. In cash terms we have
entire spectrum of the sector is about 1.1m, your employees are working from, it’s easy to put more into banks than what we’ve put into
about two per cent of staff. It’s still early days in offshore most functions. As the recovery picks the entire education spend.
this recession and we suspect that more jobs up and firms are keen to cut costs offshoring
will go before the year is out.” could become more of a problem.
“Our children and grandchildren will still be
Larger organisations are now restructuring so There seems to be little to feel glad about. But saddled with the financial crisis of 2009. Unite
more jobs could well go. “We have to be the financial crisis has brought about a must ensure that when it comes to regulation
realistic – we could lose between 10 – 30 per discussion on what we want from banks. “Unite the maintenance and support of the financial
cent of the total sector workforce, it’s certainly wants a diverse financial sector, including services sector must be in the public interest.
not beyond the realms of possibility,” adds Rob. mutuals and credit banks, all delivering a good Our reps must be directly involved so we can
service for the customer and good quality jobs determine the future of the sector – and not
Just how bad is the crisis? Is the worst over? for the staff,” says Rob. leave it in the hands of the speculators and the
No-one is entirely sure. But although the spivs.”
economic recovery may well take place fairly Rob believes we could learn a lot from the
soon, in the finance sector the effects of the mutual society and small commercial bank • Download your copy of
downturn may well be felt for much longer. models. “At the start of the 20th century there The financial inclusion centre at
Rob believes a large part of the problem is the were 1,700 mutual societies – now there are www.unitetheunion.com
political failure of successive governments to just 52. In Scotland there were small
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