A couple of “industries”, audit and management consultancy, which have deliberately entwined themselves round each other and called themselves ‘professional services’, have developed strongly monopolistic tendencies. The degree of industry concentration is truly remarkable: the four leading firms employ around 650,000 people, earn revenues of over US$100 billion, and take around 80% of the global market for large and medium businesses, plus a huge involvement in public sector consulting.
The big four ceased to be truly competitive decades ago. They now exist for the benefit of their own people, rather than their customers. It’s a carve up comparable to the various cartels and closed shops which existed in the City of London prior to the ‘big bang’. It seems unlikely to last much longer.
Continue reading Monopolistic Complacency and the Big Four
The Financial Services Authority’s report on the collapse of the Royal Bank of Scotland is published this morning and this afternoon the Prime Minister will explain to parliament the reasons for last week opting out of some of the EU decision processes. The FSA report is an examination of disastrous failing in the financial sector. Cameron’s speech is an explicit defence of that sector’s right to continue such failing.
Successive deregulatory initiatives by both Conservative and New Labour administrations have led to the conflation of traditional banking activities with those exploiting the open access and free market in financial speculation. That is what encouraged Fred Goodwin to bully the traditional RBS into its unintelligent acquisition of ABN Amro. It’s a mistake that, despite Cameron, we don’t need to continue making.
Continue reading The Coalition’s Rebalancing Act
British Prime Ministers and their Chancellors are clearly in the pocket of the City of London, as regularly demonstrated by their red faced compliance at the Lord Mayor’s fancy dress functions. The politicians dutifully swear their allegiance. And they mean it, as Cameron recently showed by vetoing the Franco-German proposal for a timorous financial transaction tax. It might have put some friction into the City’s speculative finance machine and offered a chance of slowing it down and ultimately of reducing its size. Like all his predecessors over the past three decades, Cameron would contemplate no such challenge to the City.
That appears to be the only certain position he holds as he attends the EU summit The rest of his pre-Summit statements appear to be incoherent bluster, largely aimed at placating the emerging Tea Party element of his own party. And specifically not aimed at what he himself previously referred to as ‘rebalancing’ the UK economy.
Continue reading Cameron Fights for the City against the People