Consuming Issues: Stop moaning about your bank - just go somewhere else
Saturday 26 February 2011
Capitalism is an undemocratic system. Unlike democracy, some have more "votes" than others, because they own more shares in an institution, or because they have more to spend on certain things in certain places. Still, we consumers have more power than we might realise. Without us there would be no companies. Or indeed banks, to bring me to my point. For if you are really, really upset about the bonuses the banks are paying to their traders and managers – £6bn in all – then my suggestion is to do something about beyond whinging. And that something is to move your account. Put at its simplest; if you don't like the £9m Barclays is paying to its boss Bob Diamond, say, then you can always boycott Barclays.
You may recognise that phrase because it worked before. The Boycott Barclays campaign in the 1970s and 1980s – especially among students – helped to persuade Barclays to divest from its operations in apartheid South Africa. It took 16 years, but in 1986 the bank buckled and sold the subsidiaries. The same pressure could be brought to bear today. Why, you might l ask, should I have to disrupt all my regular payments and go though heaps of hassle just because the people who run my bank are greedy? To which the answer is threefold.
First, it is easier than ever to switch bank accounts. Much has been written, rightly, about the pitifully feeble competitive state of the market for banking services, but you will still find that another bank will be keen to take your business, even your overdraft. I had an email the other day from Santander offering me £100 to switch to them. I have no idea whether their deal is really value for money, but I mention it as a small piece of evidence that the banks are not that indifferent to winning custom. So the hassle may not be as onerous as you think, and you can quite easily join an arguably more ethical organisation such as theCo-op Bank, say, or the Nationwide Building Society.
Second, this is one of the few ways you can influence the behaviour of a corporate in a capitalist society. Short of building up a substantial shareholding, the only thing that bank customers can do is to move their accounts. We don't think twice about huffily declaring to supermarket checkout staff or a budget airline representative that we will take our custom elsewhere if we encounter poor service. That ought to include the way that companies treat their employees and fulfil whatever social obligations you happen to think fit. To take other, more ethically-driven examples, we don't have to buy trainers made in sweatshops or bananas grown on exploitative plantations or go on holiday to repressive regimes, and we don't have to bank with people we don't like.
Third, I ask you to consider the sophisticated view that a bank that pays extraordinarily large sums of money to people to take unnecessary, dangerous risks with your money is not really a safe or suitable place to leave your money. It is true that there is an industry compensation scheme and the Government guarantees deposits up to quite a high threshold (£85,000 last time I looked); but, as long history shows us, governments and guarantees come and go. In the final reckoning we should all take responsibility for what we do with our own cash, just as we do when we buy a car with a reputation for passenger safety, or choose a school for our children or assess the crash record of an airline. There is such a thing as responsibility, and it doesn't just apply to the bankers.
I will not be shifting my bank account from NatWest because I'm not that bothered about what they pay Stephen Hester and his colleagues, as such. I agree that the amounts are obscene. I agree that it is especially distasteful in a state-owned institution. I agree the whole banking system has been reliant on state support on the cheap, and they are being cheeky. My perspective is simply that there is a lot of high pay and social injustice around and corporate abuse, and I would be happy to tax all of the rich in a fairer, more rational fashion.
So I would levy heavier taxes on the incomes and wealth of the traders and execs of banks irrespective of state support at all; on the overpaid directors of companies far removed from finance; on aristocrats; non-dom billionaires; property speculators; fat cat lawyers; agri-farmers; pop stars; premiership footballers; local authority chief executives, the whole plutocratic lot. I would vote for it. And I would stop whinging about the banks.
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