In Real Media’s new show Join The Dots, senior editors Ranjan Balakumaran and Kam Sandhu discuss the meaning and role of deregulation in the UK
Story Transcript
KAM SANDHU: Hello and welcome to Join the Dots. This is a new Real Media show, coming to you fortnightly. I’m Kam Sandhu. R. BALAKUMARAN: I’m Ranjan Balakumaran. KAM SANDHU: This is our first episode. Just to tell you a little bit about what this all about, Join the Dots, as it says in the title, is all about pulling together certain aspects of a term, or an issue, or a theme that is very, very prevalent in politics, but still remains, perhaps, quite mysterious. Would you agree? R. BALAKUMARAN: Yeah, just connecting up what’s going on in the various stories, and what’s missing. What’s going on? What are we not being told? That sort of thing. KAM SANDHU: Yeah. The first thing that we’re going to talk about in the first episode is deregulation. Now, we were going to talk about this anyway but the reason that we’re going to make this our first episode is because Grenfell has happened. The details of that are still coming out. Even though it happened weeks ago, we still feel like there’s no one to blame. We still don’t feel like whose responsibility is this tragedy? R. BALAKUMARAN: Yeah, and because we’re massive geeks, we’ve already asked questions to certain people about regulation. It turns out that deregulation might not exist, re-regulation, all these other variations. There’s a reason why it’s so confusing, because it’s purposefully vague. KAM SANDHU: Exactly. We might as well go straight into one of our first clips. We spoke to David Graeber, anthropologist and author, a few weeks before the election. This is him talking about whether deregulation means anything at all. R. BALAKUMARAN: Something that I noticed when I watched Nigel Farage interview Marine Le Pen, was the difference in their views on deregulation. Trump openly loves deregulation, so does Farage. Marine Le Pen says that she’s completely against it. DAVID GRAEBER: Which is fascinating because the phrase deregulation is such an ideological. It’s nonsense. I mean, I looked into this and, essentially, it’s all about getting in the first claim. They always say in law, it’s who sues who first, or claims damages first is the 98% of everything. You know, it’s the same thing. Who gets to claim their legislative change is a deregulation, rather than a regulation, sets the entire argument. In America, you had the deregulation of the banks and the deregulation of the telecommunications industry. In the telecommunications case, it was getting rid of a managed competition between a few oligopolies and opening up to a lot of mid-range firms competing with each other. In banks, it’s exactly the other way around. They start with a bunch of mid-range firms competing with each other, or the airlines, I’m sorry. Banks too. They end up with a few oligopolies. Either one is called deregulation. They’re exactly the opposite thing. All that deregulation means is changing the regulatory structure in a way I like. R. BALAKUMARAN: Right, so deregulation can be consolidation and deregulation can be competition. DAVID GRAEBER: Exactly. It’s not about getting rid of government interference because let’s face it, banks can’t actually be deregulated. Banks are institutions that governments give the right to make up money. You can’t say, “You can make up money any way you like.” That would be absurd. Then they’d just keep money and keep it. Banks are intrinsically regulated. Their very existence has to be regulated. They are themselves a form of regulation. KAM SANDHU: That was David Graeber talking about deregulation with Real Media a few weeks ago. What are your thoughts on what he said? R. BALAKUMARAN: Well, I suppose it speaks for itself. It’s an extremely confusing thing if you think about it from the point of view of deregulation is good, or it means something. That actually, it can mean whatever you want, you know? It’s the person who says, “I’m changing the law,” can just say, “I deregulated everything.” KAM SANDHU: Yeah. One of the common tropes is to back deregulation is to suggest that the state is interfering too much, right? The burdensome red tape. Deregulation, we need it because the state is holding us back. It just needs to get out of the way. David Graeber is an anarchist, so he’s not interested in state interference, but this is not about that. This is about how this term is weaponized for certain people to get what they want. R. BALAKUMARAN: Yeah, I think that he’s saying that the state isn’t disappearing at all. The only thing that’s happening is there’s less people are officially responsible for stuff when it goes wrong. KAM SANDHU: Which brings us back to Grenfell, which is the reason that we’re talking about deregulation today. Obviously, we’ve had the government, Sajit Javid said that the government was pursuing a deregulation agenda last year, in March 2016 when he made a speech. We heard lots of stuff about the burdensome red tape, which is now coming back to harm the conservatives, perhaps. In this year, we had … Some of you may not have heard about it, we had the Red Tape Initiative being set up. The people involved in that were Oliver Letwin, Michael Gove. This was cross party so there was Liam Byrne, there was Jo Swinson. On top of the deregulation that had already happened, we had a Red Tape Initiative being set up this year to remove even more red tape. R. BALAKUMARAN: Yeah, and also Sajit Javid, after Cameron came in, after the deregulation bill was passed. He then said, when he came in, he said, “Okay, everybody. Let’s get ready for more deregulation.” It’s almost the third round. KAM SANDHU: Yeah. That’s the 2015 bill was before that. That was described as a mini TTIP, wasn’t it? R. BALAKUMARAN: Yes. TTIP, the Transatlantic Trade and Investment Partnership, the deal between the U.S. and the EU, we’ve covered that in one of our films. Yeah, when I was following people who were protesting that, then they told me about the deregulation bill, which I hadn’t heard about. That took lots of different pre-existing U.K. legislation and changed bits of it in order to make it more corporate friendly. There was one very controversial … Many, but there’s one very specifically overarching controversial part in it, which was the growth clause, which I believe was Clause 88. KAM SANDHU: Right. R. BALAKUMARAN: Which said that regulators, regulatory bodies need to think about growth. Growth of the economy above other priorities. KAM SANDHU: Anything else. R. BALAKUMARAN: Yeah. KAM SANDHU: Regulators need to think about growth, above anything else? R. BALAKUMARAN: Well, yeah. Different people have said to me different things about whether it is above everything else, but they have to really take that into account. KAM SANDHU: Interesting. We actually have a post that we found here from 2015 by Jen Persson, who’s talking about Clause 88, the Bingo! clause. R. BALAKUMARAN: Yeah. KAM SANDHU: Yeah, if I can just read the opening of this, because it’s quite chilling when we first found it. This is from Clause 88, the Bingo! clause of the deregulation bill, from February 2015. “Lord Tunnicliffe asked in Parliament on November 20, 2014: ‘Are these new clauses a license for regulators to approve regulations that kill people to save money?’” R. BALAKUMARAN: Yeah, so that’s part of the deregulation bill debate. It got passed in the end. KAM SANDHU: You kicked up a bit of a fuss about it at the time, didn’t you? R. BALAKUMARAN: Yeah, well other people told me about it and they were trying to do something about it. Jen Persson was one of the people who was doing quite a lot about it. Yeah, I remember calling the Guardian and raising it among certain campaigning groups. Nobody thought it was very important, to be honest. Some people said that there was too many other things going on. The Guardian certainly did, and campaigning groups. It’s just not very sexy, is it? Saying, “Oh the deregulation bill.” People didn’t really … I think they were more interested in talking about the environment and these other things, as if this had nothing to do with it. KAM SANDHU: Yep. R. BALAKUMARAN: I mean, it’s hard to explain. It’s so dry. It’s boringized, isn’t it? KAM SANDHU: Persson describes it in that post, actually, as very bland, right? How do you get people to talk about deregulation? It’s unfortunate that something like Grenfell has forced it onto the agenda. R. BALAKUMARAN: I would say it’s forced regulation onto the agenda. KAM SANDHU: Yeah. R. BALAKUMARAN: The absence of regulation. Has the word deregulation been used much? I’m not sure. KAM SANDHU: Yeah. Well, we had John McDonnell saying recently that the people in Grenfell were murdered because of political decisions and political choices. We now have a clip coming from David Whythe, corruption expert, who talks about deregulation as, in fact, re-regulation of ideas, of economic ideas, and a neoliberalism. DAVID WHYTHE: When governments say we’re deregulating because we’re allowing you to buy toxic debts, whatever you want, or develop new derivative products that we’re not going to impose rules on, of course that’s deregulation of a particular segment of the market. The market, as a whole, is regulated, is regulated from root to branch. All we’re looking at is a different form of regulation. A regulation that gives corporations a free rein, or allows them to make profits in a much quicker way. Governments always regulate markets, they always regulate economies, and corporations. They just do it in particular ways. Sometimes it’s better for us, and sometimes it’s much worse for us. I think in the last 30 to 40 years, the process of re-regulation, under neoliberal economic systems has made us much worse off. KAM SANDHU: That was David Whythe, corruption expert, saying that deregulation, or re-regulation under neoliberalism, has left us worse off. In the case of banking, specifically, which is what he mentioned at the start there, and what Graeber mentioned, I’d say that’s pretty difficult to argue against, wouldn’t you? R. BALAKUMARAN: Yeah, sure. Financial crisis caused by, again, people having their investments invested in things that they didn’t understand. It’s happened many times before but it looks like they pioneered and innovated to the point where it happened again in a unprecedented scale. KAM SANDHU: Mm-hmm (affirmative). Speaking of which, we’ve got a extract here. Speaking specifically about deregulation, or regulation, or whatever we understand that to be. This is from Ian Fraser’s Shredded: Inside RBS, the Bank That Broke Britain, which is recommended reading. R. BALAKUMARAN: Definitely. KAM SANDHU: [inaudible 00:10:25] R. BALAKUMARAN: Yes. KAM SANDHU: I would say. “Brown congratulated himself for resisting pressure to toughen up the regulation of their activities, bankers activities. Thanks to the bankers’ brilliant ingenuity and remarkable achievements,” he said, “Britain was living in an era that history will record as the beginning of a new Golden Age. Economic Secretary to the Treasury, Ed Balls, was no less unctuous toward the banking fraternity. Speaking in 2006, Balls said it was essential that banks should make turbocharged profits, adding, ‘My starting point, as a Treasury Minister, is this, what more can I do? Can we do together? To support and enhance the critical role that banking plays in our economy.’ “Even in May 2007, Balls was championing the rights of bankers to do as they choose, and insisting that government’s main role was to reduce regulatory interference, even though it was already clear to may others that the fraud-based global credit bubble had burst. Speaking to a committee of the House of Lords that month, Balls praised the FSA from the rooftops for its lightness of touch. Saying, ‘It is very unusual to be a government minister who’s able to say, with credibility, on a public platform, that the U.K. system of regulation is a substantial competitive advantage to the British economy. You can absolutely say that in the case of the financial services industry.’ “He added that the FSA’s approach,” the FSA being the regulator, by the way, “Gives the financial services sector the ability to innovate, and to be flexible, and is a big competitive strength for us. We always need to be mindful of the need to reduce the burdens where we can.” Wow. That’s a very revealing extract, again, from Ian Fraser’s Shredded. Describing, really, a moment where there was so much audacity with politicians able to say, “Yeah, deregulation is the thing. What we need to do is not interfere with banks,” even when that picture was crumbling. R. BALAKUMARAN: Yeah, at that late stage. KAM SANDHU: Mm-hmm (affirmative). R. BALAKUMARAN: Interesting that he says, “This is the U.K.’s main selling point.” I remember speaking to Ian Fraser when he released that book and he said exactly that. The U.K. was saying, “We have a lower regulation than the U.S. Come and float your company on the British stock market, and you’ll be able to get away with basically all sorts of human rights abuses, etc, etc. No one will ask any questions.” KAM SANDHU: Yep. That’s one of the things I guess we’re talking about with regulation is that in this language, we stopped seeing the human impact of these things. We’re actually going to go back to David Whythe, who’s going to be talking about corporations and why we should be less trusting. This touches on the public-private relationship that we’ve seen at Grenfell, that we’ve seen during privatization under neoliberalism. Yeah, here’s David Whythe. DAVID WHYTHE: One of the things that we need to contemplate in terms of the relationship between governments and corporations is that we trust corporations too much. You know, I don’t say that as someone who’s a naturally mistrusting person, but I just mean that we have a completely wrong idea of how we think about private companies, about corporations. We think of them as citizens in their own right, with responsibilities. The whole corporate social responsibility debate is all about how, potentially, companies can make our lives better. We forget, actually, that the bottom line is always the bottom line. We forget that companies are there primarily, and are under a legal obligation to maximize financial returns for their shareholders. If we take that legal fact seriously, then we have to say, “Well, we can’t trust them, necessarily, to control the things that affect our lives and our livelihoods the most.” I mean, you know, we can’t trust them to supply energy, right? We can’t trust them to run prisons, or the Atos case, and Maximus, of course, doing very similar things now, to assess people for work, because they get profits from doing that. What we end up with is an economy in which we forget about the human impact of corporate activities because we trust companies. We have to stop trusting companies and we have to stop seeing the interests of governments, and the people and companies as being on in the same. They’re not. We have to sever that relationship. KAM SANDHU: Strong words there from David Whythe, discussing why we shouldn’t be so trusting of corporations. We talked about how the market can’t exist without the state. We talked about deregulation is, in fact, re-regulation, or, in fact, might not mean anything at all. We talked about how that term has been used to further the neoliberal agenda and the economy. We also talked about how the structure of corporations mean that we shouldn’t be trusting of them. If we take the fact that they need to put their profits first seriously. R. BALAKUMARAN: Yeah, I think this idea of the state and the corporations is separate is something that David Whythe’s work that I’ve read, he basically says that they work together. The state doesn’t disappear. People talk about globalization meaning the state has less power and the companies and the markets have more power. What he says is that it just reinforces the power of the state. Which, things like [inaudible 00:16:08], things like that would also- KAM SANDHU: Yeah, very good example. R. BALAKUMARAN: Go onto. KAM SANDHU: Well, that’s all we’ve got time for today. Hopefully, you found this useful. We want to hear from you so like, share, comment. Tell us what you think about deregulation. We’ll be back very soon with another episode. See you next time.
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