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IPPR’s report , “Definancialisation a democratic reformation of finance”, sets out an ambitious agenda for ‘definancialisation’, for rolling back the “socially useless aspects of modern finance” and advancing both its productive potential and the democratic interest over its activities and objectives.


Financialisation – the “increasing role of financial motives, financial markets, financial actors and financial institutions in the operation of the domestic and international economies” – is arguably the most important structural change in British capitalism in the last 30 years. The rise in the scale, scope and profitability of financial activity relative to the size of the UK’s economy in this period is well-known. For example, the balance sheet of the UK banking sector grew from 40 per cent of GDP in 1960 to 450 per cent in 2010. The consequences of financialisation more broadly, both positive and negative, are also well understood.


According to the report the financial implosion of 2007–08 should have been used as a “provocation to rearrange the place of finance in our economic lives”. Instead, six years on from a financial crash that cost British society the equivalent sum of fighting a major war, too little has changed. Financial crisis has ossified into relative political stasis. Contemporary policy debates are either inadequate or focus on treating the consequences of our financial system rather than changing its underlying structures.


In this report IPPR argue for structural reform to address the deeper institutional arrangements that underpin financialisation. The report says that by doing so, its recommendations should help to build a financial system that operates without public subsidy (the ‘bailouts’), where rent-seeking is limited, and where the relationship between finance and production is substantially tightened.


IPPR set out two principles for this programme of reform:

  • The financial system is a vital utility and the flow of credit to the real economy an essential public good which should be guided by and made accountable to democratic institutions. However, this does not mean it believes rigid, explicit targets should be set. Rather, an overarching framework should be established to ensure that credit is better directed into expanding the productive capacity of the economy.
  • It believes that there are limits to regulation, necessary though it is. This will require building or reforming institutions, both public and private, that are better able to create and sustain equitably shared growth.


These principles lead to three broad objectives:


  1. Targeting credit at the productive economy – principally by giving the Bank of England the mandate to monitor and guide credit creation and flow
  2. Reassert the public interest in the financial system
    1. Establish a Monetary Commission to investigate the UK’s monetary system
    2. Strengthen equity ratio requirements to remove the implicit public subsidy to banks
    3. Create a Financial Product Board to approve new UK-traded financial products
    4. Establish an EU credit-ratings agency funded by the financial transaction tax
  3. Invest the gains of financialisation to help fund public expenditure – by establishing a national wealth fund that is able to accumulate some of the gains of financialisation and support the country’s long-term service and investment needs.

Disabled people and their families should be able to live, learn, work and get involved in their communities without extra costs getting in the way according to a new Commission launched today.  The Scope Extra Costs Commission is a year-long independent inquiry that will explore the extra costs faced by disabled people, and families with disabled children, in England and Wales. It will look at how businesses, local and national government, as well as the public and voluntary sectors can work in new and innovative ways to drive down extra costs.


The commission has been launched in response to Scope research, which reveals that disabled people pay a financial penalty on everyday living costs – on average £550 per month, with one in ten paying over £1000 a month. The report revealed that disabled people have a higher cost of living in three areas:


  • Having to spend more on everyday things like heating, or taxis to work
  • Paying for specialist items, like a wheelchair or a hoist or other equipment
  • Paying more for everyday products and services, like insurance, travel, clothes and cutlery.


Markets must work more efficiently


The Chair of the Commission, Robin Hinlde Fisher, said “The markets are failing disabled people, and they are all too often paying more than they should in many areas of their lives.


“The extra costs disabled people pay have a direct impact on living standards, preventing many from contributing fully to their local communities.


“It is crucial that companies, regulators, local government, trade bodies, and disabled people’s organisations give us their perspective.”


Effects of Extra Costs


The impact on disabled people’s finances and living standards is stark. These extra costs mean disabled people find it harder to enjoy family life fully, participate and contribute to their local communities, live independently, get into education and training, find and stay in employment, build their own financial resilience and contribute to pensions.


Over the next year a panel of business experts, economists, and disabled people will look at how businesses, local and national government, as well as the public and voluntary sectors can work in new and innovative ways to tackle the disability premium.


Find out more about the Commission here and join the debate on Twitter using #extracostscommission


Ellie Brawn, Public Policy Adviser at SCOPE, blogged recently, for the Barrow Cadbury Trust, about extra costs faced by disabled people and the Extra Costs Commission. Read the blog here.