On 2 July Ulster Bank announced another wave of branch closures and job losses as well as indicating they will be taking steps to repossess more properties. In the coming period all the banks will be implementing similar plans.
Ulster Bank want to reduce the numbers of staff by 350 as they plan to close up to 40 branches. The 350 job losses, come on top of the 1,950 job losses in Ulster Bank since 2009. In total there will be massive 2,300 jobs lost in Ulster Bank between 2009 and 2014. The branch closures will mainly be in rural areas and will result in less accessible banking services for ordinary customers. The branch network will have 175 to 185 branches, down from 238 in 2012.
The bank have outsourced large amounts of work to Britain and to India. Much of the mortgage services are now being switched to centres in India where wages and working conditions are far lower than here in Ireland. This is resulting in a reduced quality of service to customers and a higher pressure on staff.
The huge job losses and branch closures are not because of a reduction in workload. In fact, the economic crisis has increased the amount of work for the banks. Staff based in Ireland and in the branches are required to deal properly with the financial issues facing customers. Instead the banks are moving more and more work to cheaper locations and they are increasing the number of temporary and contract staff.
On the same day as the announcement of the branch closures and job losses Stephen Bell, the head of risk in Ulster Bank, made comments about plans to increase the number of repossessions.
The Labour/Fine Gael government are currently passing legislation to remove the ‘loophole’ that has prevented a number of repossessions. The reversal of the Dunne judgement by legislation will mean the banks can move towards repossession of properties that have mortgage arrears.
Ulster Bank are planning to lead the way and start repossessions within a few months of the new legislation being passed. Stephen Bell stated that 35% of those in mortgage arrears are ‘strategic defaulters’. Ulster Bank are claiming that the massive arrears crisis is due to customers choosing not to pay due to upcoming changes in personal insolvency laws. This is clearly a line that the banks and the mainstream media will peddle to distract from the reality.
The arrears crisis is due to inflated housing prices fuelled by the banks and property speculators, and the austerity measures being pursued that is resulting in unemployment and reduced incomes. The fault lies clearly with the banks, government and property developers – not home owners. The truth is that mortgage holders in arrears are victims of the capitalist establishment and not ‘strategic defaulters’.
Privatisation – wages & jobs under attack
When the banks were nationalised they were nationalised not in the interests of the public. The taxpayers got burdened with the toxic bad debts and the state ran the banks to prime them up for privatisation. The working conditions, pay and pensions in the banks have come under sustained pressure by all the banks. This assault on jobs, working conditions, pay and pensions is done with the full backing of the government. A number of ministers in the Labour/Fine Gael government have even used the super wages and ‘bonuses’ of the rotten senior management to slur all bank staff.
The Mercer Report shows that bank staff have had major reductions in remuneration – there has been a 31% cut in AIB, 23% in Bank of Ireland, 54% in IBRC and 20% in PTSB. The majority of bank staff are junior staff on modest salaries. In AIB the average salary at clerical level is €32,600 and clerical staff make up 49% of all employees. In PTSB the average clerical level salary is €30,000 and these staff comprise 42% of all employees, and in Bank of Ireland the clerical level staff are 34% of all employees with an average salary of €29,600.
Contrast these figures with the senior executives. There are 11 in Bank of Ireland on pay over €500,000 including the CEO Richie Boucher on an incredible €623,000 per annum. Bank of Ireland have 49 on salaries of €300,000 to €499,999. In AIB there are 22 with salaries over €300,000.
Ulster Bank have tended to be one step ahead of the other banks when announcing job losses, changes to the pension schemes and changes to pay. The unions in the banks and financial institutions, IBOA, Unite and SIPTU, must respond with a vigorous active campaign including protest and strike action.
Weakness invites aggression. This is very clear in the case of Ulster Bank. In 2009 Ulster Bank announced 1,000 job losses alongside massive changes in working conditions and changes to pension entitlements. Ulster Bank also attempted to isolate the main union organised there, the IBOA. This jobs massacre was followed by another announced in January 2012 when 950 job losses were announced. This plan was done after negotiations with the unions and with a degree of approval from them on the basis of being a ‘least worse’ option. Ulster Bank are not interested in engaging in honest plans and talks with the unions. The announcement on 2 July 2013 shows that Ulster Bank do not intend to seriously negotiate with the unions – rather their negotiations are tactical as they continue with more and more job losses. The unions need to make a firm militant stand.
If the banks are successful in their plans there will be even lower pay, more casualisation and agency staff, pensions will be lowered, and the stress of daily work will be deepened due to further job losses. There will also be a severely reduced quality of service to ordinary customers due to branch closures and outsourcing. The unions cannot give just verbal opposition to this. There must be organisation of workplace committees involving rank-and-file activists that have ownership over the unions’ campaign. Furthermore, co-ordination with public sector workers is essential to cut across the divide and rule tactics of the banks and government.
The Socialist Party stand for the banking sector to be under democratic ownership and control where bank workers, customers and the wider public are in the heart of the management of the banks. This would be a socialist nationalisation and in complete contrast to the government’s policy of nationalisation to burden the taxpayer with debt and prime the banks up for a fire sale to a vulture capitalist.
In a banking system under democratic workers’ and community control, with access to the vast resources that the banks contain, there would be a basis to keep branches open in communities so that ordinary customers can get access to banking services and financial advice, there would also be the basis to keep quality employment in the banks. Only socialist policies and democratic control of the banking system can deal with the mortgage arrears and housing crisis.
We stand for:
- Nationalised banking system under democratic control of workers and the wider community. No to the nationalisation of the toxic debts
- Maintain bank branches and services in all communities. Defend employment, working conditions and pensions for bank workers
- Prohibition on repossessions of domestic homes
- Tenants to have their leases honoured in cases of repossessed investment properties
- Kick out sub prime lenders. Take over their mortgage books with no compensation
- End the banks’ control of the arbitration process
- Write down the mortgages and recalculate the monthly payments accordingly. The mortgage balance should be reflective of the current value and not the inflated ‘value’ during the property bubble
- Don’t compensate bondholders and super wealthy. Ordinary savers and pension funds to be protected
- The state to build and / or make available public housing with affordable rents to eliminate the growing housing crisis.