If passed, the Financial Services and Markets Bill would unleash a wave of dangerous financial trading, driving up the prices of basic commodities. 

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Hi John,
Last week our ‘caretaker’ government introduced a piece of legislation which I can only describe as a speculator’s charter. If passed, the Financial Services and Markets Bill would unleash a wave of dangerous financial trading, fuelling volatility in the economy and driving up the prices of basic commodities. In the middle of a cost of living crisis, with people across the world struggling to pay for food and energy, it is perverse.

It’s 15 years now since the financial crash showed up the global economy as a giant casino – and we discovered that when the chips are down the poorest pay the highest price. In the wake of that crash, we exposed the way banks and hedge funds were betting on food prices in unregulated financial markets, driving up prices which forced millions of people to go hungry. In the second half of 2010 more than 44 million people were driven into extreme poverty as a result of rising food prices, while one bank, Barclays, was making up to £340 million a year from betting on food.

We won. Thanks to campaigning, laws were passed in the EU to prevent excessive speculation. It was a move in the right direction. But the financial sector hit back, and lobbied governments to water down these new rules.

Today, the British government wants to wipe these rules away altogether.

Rishi Sunak, the author of the bill before he resigned as chancellor, said he wanted to unleash a second ‘Big Bang’, recalling Margaret Thatcher’s 1986 deregulation package which ‘set the City of London free’, fuelling a wave of speculation and financialisation, instability and unrestrained greed.

We already face a food and energy crisis. While the media has focussed on way that Russia’s actions in Ukraine have driven up prices, a far bigger role is actually played by speculators in the money markets, driving up food and energy prices to make a quick buck.

This is the main reason why so many people are going hungry even when we have plenty of food in the world to feed everyone. As UN Special Rapporteur Olivier De Schutter has said of the financiers “They are indeed betting on hunger, and exacerbating it.”

We need to do more to constrain the financial sector, not rip away the rules already in place. And it’s not only about food. We've joined with a wide range of campaigners in the Finance for our Future coalition to stop the government’s plan and to build a regulatory system which protects people and planet. They already have cross party support.

After a month in which Europe has been confronted by the reality of climate change, we need to force the City to reduce its outsized damage to the environment. With more and more people affected by a cost of living crisis, we need to compel the financiers not to exclude huge numbers of people from the services they need to live a dignified life. And, given the City’s huge impact on the rest of the world, we need to make sure regulators are armed with the tools to rein in that power.

Parliament has now gone into recess, but when it returns in September we will swing into action with more targeted campaigning. For now, we’d ask you to let other people know about this bill and the harm it threatens to do by sharing my blog.
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Together we need to be ready to fight this bill in the Autumn.

Yours,
Nick Dearden
Director, Global Justice Now
** The fight for a fairer future depends on committed and passionate people like you.
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