Public sector union calls for 'heads to roll' after Government's emergency intervention » Bill payments » 24dash.com

A leading trade union called today for "heads to roll" - including the sacking of bankers - as a result of the crisis which led to the extraordinary Government intervention.

The GMB said workers were not prepared to see bankers receive huge bonuses, paid for by the taxpayer, while pay rises for public sector staff have been kept below the rate of inflation this year.

Giving millions of public sector workers, including nurses and teachers, a pay rise to keep pace with inflation would have cost just £1.5 billion - a fraction of today's banking bail-out, said general secretary Paul Kenny (pictured).

"Business as usual is now over for the City elite that organised this disaster.

"They will have to get used to living on normal incomes and paying their taxes now that the taxpayer is propping them up and calling the tune as a result," he said.

Mr Kenny said the Government had no alternative but to bail out the banks to keep the financial sector afloat but he added: "The old saying now applies with a vengeance - he who pays the piper, calls the tune.

"GMB members who are paying the piper want to see swift action to ensure that the bankers responsible for the crisis are held accountable and dealt with.

"GMB members will want to see bankers' heads roll."

The GMB was highly critical of the role of Barclays Bank in organising a huge loan to a private equity firm which took over the AA motoring organisation.

John Cridland, deputy director general of the country's biggest business group the CBI, said the Government's announcement would herald the first step on the road to financial recovery.

Labour MP John McDonnell (Hayes and Harlington) said: "Yet again, the taxpayer is being asked to pay for the mistakes of the bankers with next to nothing in return.

"I believe the Government should nationalise to stabilise the banks and must place conditions, including representation on the boards, no repossession of homes and a pay cap for bank directors with an end of bonus binges.

"Without these conditions the bail-out is nothing but a subsidy by the taxpayer to the very people who have brought our economy to the brink of collapse."

Derek Simpson, joint leader of the Unite union, said: "We welcome the decisive action today by the Government to inject capital into the markets.

"The union is demanding that this financial support is tied to clear commitments to secure vital jobs in the financial services sector.

"The Government finance must serve to make the industry more transparent and accountable."

Mr Simpson said it was not acceptable for the Government to continue to capitalise the rewards in the finance industry and said today's measures should be extended to include undertakings by the banks of no job losses, no repossessions of homes and no rewards for "failure".

He added: "It is imperative that the financial measures announced today mark the turning point in the world of banking and finance.

"Workers in the financial services industry are not the culprits of the credit crunch and we are not prepared to allow them to become the victims."

David Kern, economic advisor at the British Chambers of Commerce, said he welcomed the "radical measures" taken by the Government which he hoped would restore stability.

"But given the erratic mood of volatility in the financial market there remains clearly a risk of renewed speculative attack.

"The current financial turmoil must not be allowed to damage the real economy. The vital flow of finance to businesses and consumers must be maintained at all costs.

"A cut in interest rates tomorrow and a reduction in business taxes remain vital steps."

Matthew Elliott, chief executive of the TaxPayers' Alliance, said: "The Government is using taxpayers' money as an easy way out, before having fully explored other options that wouldn't have put £50 billion of our hard-earned cash on the line.

"They could and should look into making deposit protection more credible.

"However, now the Government has decided to spend this £50 billion, they need to put the mechanisms in place to ensure that the money isn't frittered away on excessive bonuses and to make sure that it is not wasted."

TUC general secretary Brendan Barber said: "We welcome this bold package, but it is vital that the vast sums of taxpayers' money are used to change bank behaviour, not just bail them out.

"Fat cats must be put on a strict diet. They must start to lend to business again, and they must cut the cost of borrowing.

"Most importantly, the Government must make sure the banks can never gamble with peoples' livelihoods again. A very different banking system must emerge at the end of this.

"But more must now be done. The Chancellor must suspend the 'Golden Rule' on borrowing tonight to head off spending cuts, and must start to plug the gap by taxing those who have made millions from the asset bubble.

"And tomorrow the Bank must follow the Australian lead with deep cuts in interest rates of at least 1%."

Labour MP John McDonnell added: "Without full nationalisation the Government is effectively nationalising the banks' losses and privatising the profits so that taxpayers will now pay for this crisis caused by the greed of the bankers.

"I fear that it will be too little too late. Without full nationalisation at least we need very detailed and specific conditions on any taxpayers' support."

Dave Prentis, general secretary of Unison, said: "Tough times demand tough decisions but any intervention to secure the banking system should not merely bail out those who have caused this crisis in the first place.

"The Government must include more regulation, more control and more accountability to ensure that irresponsible behaviour is not repeated or rewarded.

"Working people need protection from the fall-out of the current financial crisis.

"Relief from rising fuel prices must be financed by a windfall tax on the energy sector, combined if necessary by price controls. In addition, measures must be taken to minimise evictions and homelessness, including empowering councils to take on threatened homes.

"The current public sector pay policy, which imposes pay cuts on millions of public sector workers, must be abandoned. Increasing public spending now would stimulate the economy and counteract the downturn in the private sector."

John Wright, chairman of the Federation of Small Businesses, said: "This is an ideal opportunity now that the Government has a big stake in the banks to enter into a constructive dialogue with them about their commercial practices and their charges regarding small businesses.

"Almost half of our members have seen an increase in the cost of finance over the last year. It is crucial in these tough times that small businesses have access to fair overdraft and loan rates.

"Today's announcement should be coupled with assurances that more money will be made available to small businesses to help sustain them and get them through the next year."

Respect MP George Galloway said: "Everyone now knows that even if these measures prop up the financial system, we are heading for the mother of all recessions.

"At almost every step the Government has delayed. It's taken far too long for the Prime Minister and Chancellor to detach themselves from the outdated dogmas of free market economics.

"Despite the bail-out today, we still face a very serious recession, a massive rise in unemployment and businesses collapsing, and this will threaten a further financial crisis and a much bigger demand on the taxpayer - unless more is done to pump-prime our collapsing economy now."

MP Mr McDonnell added that there was "growing alarm" among his colleagues at Westminster at the "give-away bank bail-out with no control".

He said: "This package is a poor deal for the taxpayer. This is a short-term fix without a long-term strategy to reform the banking system.

"The only take-up will come from those banks in difficulty and in effect we are nationalising their bad debts and throwing good public money after bad.

"Eventually this bail-out will have to be paid for, and that will inevitably mean tax rises or cuts in public expenditure. Either way, that will deepen and lengthen the recession by reducing demand within the economy."

"This is a very bad deal and will be paid for by taxpayers' money and the loss of people's jobs and homes."