By David Beeson
What a great asset a short memory can be. To those who want to take advantage of it.
In the run up to the budget, the Tories are going to be relying on our having forgotten a lot. Get set for their increasing clamour for an apology from the government for the economic crisis. They’ll be calling on us to join them in denouncing Ministers for their failure to control the bankers in their bonus-fuelled intoxication.
Just keep pinching yourselves and reminding yourselves that it’s the Tories who’ll be demanding this. The guys who gave us de-mutualisation of the building societies. Who gave us light-touch regulation of the financial sector. Who gave us trickle-down economics.
In other words, who were at the source of it all.
Others, outside the Tory Party, may criticise Labour for not having done enough to rein in the bankers. But the Tories were the ones that gave the bankers their head in the first place.
Time for an apology? Let’s have one from Thatcher, Tebbitt, Lamont and their successors on the present Conservative Front Bench.
Perhaps Ken Clark would like to be the first to express his regrets?
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You must learn to separate the two. I have no problem with people telling me I've got my facts wrong, my arguments are asinine, or that my politics is naive or cynical. But when people go ad personam, accuse someone of mental illness, mention their family, insult them directly by calling them names, that's a personal attack.
There's negative campaigning, and then there's he politics of personal destruction and smear.
Simple really, if you have a moral compass.
The environment in which this all became possible was set by a mindset change in the 80s, led above all by Ronald Reagan (well, by the men around him anyway - it was never clear to me that Reagan fully understood what was happening in his name) and massively endorsed by the then Tory government led by St Maggie (she who can do no wrong). I'd love to see the Tory front bench saying 'yep, we got it wrong, and the government just kept going down the road we first opened up, so now let's all roll our sleeves up and dig ourselves out of this hole'. What they're actually saying is 'apologise, apologise, apologise'.
Neither contstructive nor entirely honest in terms of accepting their share of the blame (which is pretty large).
If these problems are still hanging around after 12 years, why should I believe that another 12 years is going to help? If I hire a plumber/builder and they don't do the job properly, I'm not going to risk letting them have another go.
Time to come out. It's over.
Surely the Tories could use that very same argument to defend their 18 years in power, and blame everything on the previous Labour administration.
Sorry, that argument isn't going to wash. When the Tories come into power, they'll have only one term where they'll be able to blame New Labour for inherited problems, but after that first term, they'll no longer be able to blame Labour. And if in their third of fourth term the Tories are still blaming New Labour for their problems, they'll get the same reaction. "Take responsibility for your own mistakes"
Despite all the protestations of Brown and Labour about "irresponsibilty" in the banking sector, this government are still up to the same things. During the crisis Brown said he wanted lending at 2007 levels - that was the problem, not the solution. PFI privatises profit and nationalises risk. Don't believe that these projects won't be bailed out if they go south. They are schools and public buildings, they aill have to be. All this off balance sheet, in SIVs you could say. All disgraced practises. This tells me Gordon Brown hasn't learnt from his mistakes, and his lack of apology leads me to believe he doesn't think he made any.
Finally, and most shockingly you don't seem to understand my original point. If you want us to believe you were responsible for 10 years of growth in this country which was largely due to debt and benign international coniditions you have to accept responsibility for the bad times too.
This is an excerpt of the debate on the Bank of England bill 11 November 1997.
This is from Peter Lilley who at the time was Shadow Chancellor of the Exchequer.
" The Bill will hive off debt management to a new quango under the Treasury. We know that funding policy is an intrinsic part of monetary policy, and the Bill will leave the Bank as a one-club golfer without even a putter left in the bag. How will the Treasury, the Bank and the new board co-operate to handle monetary policy? If they need to get together, why is it necessary to separate them in the first place?
With the removal of banking control to the Financial Services Authority—the "super-SIB"—it is difficult to see how and whether the Bank remains, as it surely must, responsible for ensuring the liquidity of the banking system and preventing systemic collapse.
What happens if the needs of the banking system conflict with those of the inflationary target? That has happened in the past in the United States, and it could conceivably be happening in Japan. I understand that there is a suggestion that a committee is to be established to work between the Bank, the FSA and the Treasury to try to cope with that sort of problem. If that is necessary, why is it necessary to hive off powers in the first place?
That brings me to the creation of the FSA as a super-SIB. The Bill is only part of the process, but it will on implementation directly conflict with pre-election statements. More importantly, concerns expressed by the Chief Secretary when in opposition may, although he has disowned them today, prove well founded.
The coverage of the FSA will be huge: its objectives will be many, and potentially in conflict with one another. The range of its activities will be so diverse that no one person in it will understand them all. Its structure will be as complex as those of the organisations that it replaces, if not more so. Practitioner involvement is likely to diminish, and costs are likely to escalate as salaries are equalised upwards.
We have no objection to the objective of trying to bring greater simplicity and one-stop shopping to the business of financial regulation, but we fear that the Government may, almost casually, have bitten off more than they can chew. The process of setting up the FSA may cause regulators to take their eye off the ball, while spivs and crooks have a field day. We shall observe closely what is going on in the development of the proposed legislation.
Through the Bill, the Chancellor of the Exchequer seeks to create a Bank with a duty to pursue an inflation target set by the Government, and to accommodate other Government policies. The members of the Monetary Policy Committee will be appointed by the Government, and it will, albeit only in a reporting sense, be accountable to Parliament. If need be, the Government, with the assent of Parliament, will be able to override the committee's judgment. We may approve or disapprove of these arrangements, but we can agree that it may claim to be, as the Chancellor asserted in his statement, a British solution to meet Britain's needs.
The paradox is that, no sooner had the Chancellor published his British solution, than he announced that he wanted to sweep it away in a few years' time and replace it with a European solution to meet Europe's needs.
The European solution is, of course, rather different from what the Chancellor thinks is right for Britain's needs. The planned European central bank has no inflation target laid down by a democratically elected Government—still less a Government responsible to the House. Only one of its directors will be British, and he or she will take an oath that they will act not in Britain's particular interests but in the interests of the whole. It will not be accountable to any Parliament or Government, least of all Britain's Parliament or Government. Nor will any Government—certainly not the British Government—be able to override its judgment if they think that the national interest requires it.
Some hon. Members may prefer the approach laid down in the Maastricht treaty to that laid down in the Bill, but it is clear that the Chancellor of the Exchequer does not. If he did, he would have modelled his Bill on the Maastricht paradigm. Can he or the Chief Secretary tell the House why they did not do so? May we assume that they considered their approach superior to the Maastricht model? "
Labour did not listen and it did not adapt its Bank of England bill.
This was not a failure of Thatcherism, this was a failure of Blairism aided and abetted by Gordon Brown, Chancellor and Alastair Darling the 1st Secretary to the Treasury.
This was a domestic failure, we did not have the right defences in place.
An epic fail.
In my view, our success has been based on a service sector that has done well, and investment in infrastructure and public services necessary to keep it all ticking over. We could have still had plenty of good times without a deregulated financial sector. In that sense, Brown has done well.
I still don't see how any of it would ever have mattered without sub-prime, either.
This approach is a tory message - that of domesticating the whole problem.
It is a highly flawed one.
You're behind the curve. Allow me to bring you up to speed.
On 14th March the following appeared in the Guardian:
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In an interview before a speech to Birmingham business leaders in which he acknowledged the Tories should have realised banks were accumulating unsustainable debts, Cameron said: "Of course I am sorry we got some things wrong. We were right to call time on government debt, but we should have said more about banking debt and corporate debt."
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Is Gordon big enough to follow suit, following 12 years in power? Somehow I doubt it. Never mind, I'm sure the electorate will have it brought to their attention around this time next year. The ticking of the clock will get louder and louder from here on in.
Of course what actually happened was Blair and Brown enjoyed the ride, took their eyes of the ball and Brown is now left to pick up the shattered mess that is his reputation. A pity really, although given where we are now I don't think many people feel sorry for him.
All of this has occurred WITHIN the last twelve years on Labour's watch.
http://www.bombersonbenefits.blogspot.com
By 'was impossible' you presumably mean 'seemed unnecessary' which indicates that the major problem was not the lack of ability to reinstate regulations, but the lack of an appreciation of the dangers of what was happening.
Having a deregulated market is one thing, abandoning responsibility for the economy you superintend as a government is entirely another. No new regulations were needed for those with power to realise house prices were rising too fast in both in the USA and here. Had measures been used to control this and other associated irresponsible borrowing then the sub-prime fiasco would have been much reduced in its impact as the scale of sub prime lending would have been substantially reduced. But we know that Clinton, not Reagan, was largely responsible for setting Fannie Mae and Freddie Mac loose in 1994 with his well intentioned National Homeownership Strategy.
The Labour Government [and probably a Conservative Government would have behaved similarly] as you rightly say, partly those warning signs as those of delivery and were reluctant to put the brakes on, spoiling the party. But a party it was; I could see that it couldn't last, as so could the majority of people I know.
But it isn't his money, so he will set up hugely expensive regulation (at taxpayer expense) to show that he is 'doing something' - even if he doesn't believe in it.
There is no magic formula for banks to make money (to pay you interest) - they experiment, they duck, they dive and generally do OK - occasionally not. To pay you interest, they have to take the money off someone else - it doesn't magically appear.
The governments role should have been no more than to protect individuals deposits up to (say) £50,000 and leave the banks to get on with it -- if they screw up then they fold and their shareholders pay the price - the public get basic protection.
The only reason anyone cares about the Banks now is because Brown gave them masses of our money - I didn't care about the banks any more than I care about (say) Tesco or Virgin or any other company, they aren't using my money and they can do what they like with their own (and their shareholders) money.
Brown saw a hole that was nothing to do with the tax payer and jumped in feet first - and he hasn't stopped digging since.
One week end while parliament were not sitting brown and darling got together and chose to get the taxpayer involved in a massive scam that we could have just ignored.
The bankers have run rings around the government. The bankers are professionals - they live to take money off others, its what they do. The government are a bunch of armatures who have never run so much as a profit making cake stall at a WI meeting.
Cut regulation - arrange our affairs so when a bank fails, no one cares except the shareholders - and when one hits the jackpot they pay their taxes.
The coverage on News24 of people queueing to get their money out could't have happened with Barings.
I don't accept this comparison.
But not only did New Labour fail to re-regulate the banks, New Labour welcomed light tough regulation. A few results from just one focused search on the treasury website (and there's plenty more):
"Progress if we invest in and nurture the skills of the future, advance with light touch regulation, a competitive tax environment and flexibility. Grow even stronger if this is founded on a strong domestic market built on the foundation of stability."
Speech by the Chancellor of the Exchequer, the Rt Hon Gordon Brown MP at the Mansion House, London; Check against delivery; 21 June 2006
"And now the determination of the financial services authority to extend their risk-based approach of financial regulation that is both a light touch and a limited touch."
Speech by the Rt. Hon. Gordon Brown MP, Chancellor of the Exchequer, at the Advancing Enterprise Conference in London; 02 December 2005
"In the old regulatory model - and for more than one hundred years - the implicit principle from health and safety to the administration of tax and financial services has been, irrespective of known risks or past results, 100 per cent inspection whether it be premises, procedures or practices.
"So regulation came to mean that government routinely and continuously inspected everyone and everything, demanded information from all of us on a blanket basis, required forms to be filled in for all issues subject to regulation and inspection -- the only barrier to complete coverage usually being a lack of resources.
"This approach, followed for more than a century of regulation by governments of all parties is outdated.
"The better, and in my opinion the correct, modern model of regulation - the risk based approach - is based on trust in the responsible company, the engaged employee and the educated consumer, leading government to focus its attention where it should: no inspection without justification, no form filling without justification, and no information requirements without justification, not just a light touch but a limited touch."
Speech by the Rt. Hon. Gordon Brown MP, Chancellor of the Exchequer, at the CBI Annual Conference in London; 28 November 2005
Not only did New Labour fail to regulate, New Labour advocated a light touch approach, and New Labour even claimed responsibility for offering "not just a light touch but a limited touch."
Isn't it time for an apology?
That depends. Whatever they do, you can rest assured they'll be using vast resources to find their way around it.
"Al-Qaeda will not respond to legislation."
OK, kudos for that!
If he is so wound up about apologies, let's work backwards from the recession/depression, Labour sleaze, dodgy dossiers and illegal wars.
Eventually, perhaps Adam and Eve will apologise for original sin, and God can apologise for making us fallible.
Then, maybe, David Beeson might be able to get on with his life.
"Gordon Brown helped fuel Britain’s banking crisis by pressuring the City regulator not to intervene and stop reckless lending, Lord Turner, the head of the Financial Services Authority, said."
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4808373/Gordon-Brown-helped-fuel-banking-crisis---FSA-head.html
Indeed, it is "Time for an apology" from Brown & Co.
But answer me this: has Gordon Brown as Chancellor made changes to the financial regulatory framework since Labour got in in 1997? Yes or No.
Because I'm quite sure he did just that, ergo, HE is responsible, not the Tories. Once Labour change something, you can't blame the previous administration.
If he had re-regulated banks before, he would have been strung up as 'old Labour'. Sometime you can't win, so you just have to change with the conditions.
The Northern Rock crisis was the classic outcome when no one really knew who was responsible for what. The Bank of England still had the banking knowledge and expertise but no power to act, the FSA had the power but little real banking knowledge and the Treasury who had the final responsibility was hampered by the lack of understanding and an expectation that the FSA should sort it out. A fine old mess.
Please lets not blame the Tories for this. They may have caused many problems in the past, but having worked the past 15 years in wholesale banking (yes, and still a Labour supporter) I can tell you that this one was ours. As an example, just remember the quiet and efficent way that the Bank of England handled the failure of Barings in 95. Although there was no real risk of systemic failure, it had the knowledge, power and influence to get a fix in place before it impacted the markets and the economy.
One further point on the credit crunch that no one really has mentioned. Before the introduction of sophisticated syndicated lending systems in the 90s, wholesale banking was the esoteric relm of the senior international banking specialist. Once it was automated, like so many other areas, it became more of a generalist area with huge growth with many non-specialist banks entering. Many of the problems that we have now encountered were simply not possible before the introduction of the integrated IT systems into wholesale banking in the mid 90s.
Why? Well it's blaming the Tories for being the source, the cause of the problem because of light-touch regulation etc (which Brown approved of) BUT you had 12 years IN POWER to put it right - to rectify all those things, so why didn't you?
What were you doing during those 12 years in power? Too busy with your time smearing each other?
We've had twelve years and still not defeated Al Qaeda, saved the world from global warming, et. etc. etc.
All of which I think is understandable, really.
All this kind of post does is reinforce public perception that Labour are bereft of ideas and resorting to the politics of the playground. It feeds voter disillusion, and encourages people to despise politicians even more than they already do. Which - for those of us filled with horror at the prospect of a Conservative working majority, and who see the *potential* there could be for a socially-concerned government that refrains from doing evil - is seriously not good news.
But one thing is beyond doubt, the right has no idea how to deal with the collapse of Reagan Thatcher Economics. Though I've heard nothing coherent from the left or centre left (except calls for more nationalisation - that worked so well!!) I know the new ideas will come from there.
For the love of God, when are you people going to get the message!? You've had over a decade in power and you're still trying to blame everything on the Tories.
If de-mutualisation is a problem, YOU SHOULD HAVE FIXED IT!
If light-touch regulation is a problem, YOU SHOULD HAVE FIXED IT!
Why the hell do you think we elected you in the first place if not to fix the problems the Tories created? And now, 12 years later, you're telling me that I should vote for you again because of all the problems that you've failed to address during the last 12 years.
Yes but New Labour have been in power for 12 YEARS now - not 12 months. there has been plenty of time to do something about it, as there were in so many other areas (rail privatisation for example) but New labour couldn't be bothered. Because Blair was more TYory than Labour. Simples!