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Posts tagged Gordon Brown
Brown draws flak over role in handling military budget
Mar 14th
Cameron uses prime minister’s questions to challenge Brown over military funding claims made to the Chilcot inquiry
It was possibly the most supercharged prime minister’s questions of the year so far. At 12:09pm last Wednesday the ritual jousting turned toxic as David Cameron challenged Gordon Brown’s testimony at the Iraq inquiry days earlier.
Brown had told the Chilcot inquiry that he never refused urgent requests for more military funding. Cameron did not believe him, citing two former chiefs of the defence staff who had criticised the prime minister for offering the inquiry evidence that was “disingenuous” and “dissembling”.
Several Labour backbenchers could not hold their tongues. But, they roared, Lord Guthrie and Admiral Lord Boyce were “Tories”. The implication was damning; these men might once have been characters of honour whose duty was to serve the nation but now their criticism could be dismissed as readily as, well, Cameron’s.
It was a poisonous putdown. In their view, the opinions of two of the most powerful figures in modern military history had become corrupted to the extent they were no longer impartial.
Some blamed Sir Richard Dannatt, the former army chief, for politicising the military. After all, Dannatt’s consistent criticism of defence spending in Afghanistan had preceded reports that he would become a defence adviser to the Conservatives. Beyond the hullabaloo over political bias weighed against genuine concern over soldiers’ welfare, the debate boils down to whether Guthrie and Co have a point? Did Brown starve the military of funding when he was chancellor, leaving the forces short of vital equipment?
The answer may depend on whose side you are on. Guthrie and Boyd remain adamant that Brown mishandled the defence budget when chancellor and that his prudence meant, for instance, fewer troop-carrying helicopters in Afghanistan, one of the most vexing issues facing commanders in Helmand province. Their critique was bolstered by an inquest verdict hours before Wednesday’s Commons exchange. Four soldiers were unlawfully killed after troops were given “inadequate” training, according to Wiltshire coroner David Masters.
Brown, too, remains unmoved. He told Cameron that “every request” made by defence officials for “urgent operational requirements” was met. In fact, said the prime minister, £18bn had been invested in Afghanistan and Iraq on top of the military budget. In real terms, spending was up. The Tories, claimed the prime minister, cut it by 30% in the 1990s. But the truth, as so often, is somewhere in between.
Analysts point out that the MoD has a long-term core budget while the additional cost of fighting wars comes from the Treasury reserve. Many believe this dynamic fuelled disagreement between Brown and the military men.
However, the future for defence spending appears less ambiguous. Swingeing cuts are a certainty. Days before last week’s PMQ, the defence select committee bemoaned a £21bn funding gap for scheduled military projects. If they win the election, the Tories will have to preside over huge cuts in military spending. The question is, will Guthrie and Boyd sit quietly on the sidelines when that happens?
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Credit card firms forced to make repayment cheaper
Mar 14th
The government is set to make credit card providers use customer payments to reduce the costlier part of debts first, writes Lisa Bachelor
Credit card firms are to be forced to change the way they make customers pay off their debts, in a move that could save nine million borrowers a typical £225 each a year, the government will announce tomorrow.
Cardholders who have transferred their debt to a card provider at a low or zero rate of interest but buy items on the card at a higher rate of interest, often around 20%, are forced by their card companies to pay off the cheaper debt first when they make repayments.
This makes the costlier debt on the card last longer, thus prolonging the debt and earning the card companies more interest. This costs each cardholder nearly £225 in additional interest in the first year, the Nationwide building society says.
The government, however, plans to introduce legislation to stop the practice, known as “adverse order of payments”. Nine million of the country’s 30 million cardholders hold debts at more than one interest rate on their cards, and the move will collectively save them about £500m a year. The change is being implemented after a government consultation that started in October into credit and store cards.
Gordon Brown hailed the measures in his weekly podcast last night, saying: “It appals me to think that some see an opportunity to exploit families in difficulty to make a few extra pounds profit.” He added that the measures would put hundreds of millions of pounds back into consumers’ pockets. “That’s money you could use for a family outing, a treat for the kids, or a meal in town.”
Nationwide’s product and marketing director, Chris Rhodes, said: “This review is excellent news for the consumer. A positive order of payments would mean that consumers can trust that when they make a payment, it will go to paying off their most expensive balance first. That would be good news for anyone who cannot or chooses not to pay off their credit card debt in full.”
Nationwide and Saga are the only two card issuers that do not use an adverse order of payments system. Other credit card firms are expected to be given until the end of 2010 to change their system.
The government received responses from more than 5,000 members of the public to the Credit and Store Card Review, as well as receiving input from all the country’s card issuers and a number of consumer bodies.
A government spokesman said that it became clear from the responses that the majority of cardholders were not aware that they were being made to pay off their cheaper debts first. When they understood the issue, he said, it was the area in the review that they were most keen to see changed.
One of the other main proposals made in the consultation paper, issued in October, was to force card providers to increase the minimum monthly repayment they demand. The proposal was to raise this to at least 5% of the outstanding balance.
At the moment, minimum monthly payments are typically set at a level covering that month’s interest charges. So, for example, someone with an outstanding credit card balance of £1,856 with an interest rate of 17.6% would pay £4,620 in total interest charges over 38 years and 10 months at a typical minimum repayment of 2% of the outstanding balance.
If the minimum payment was increased to 5% the cardholder would incur £748 in total interest charges over eight years and 10 months.
However, in its announcement tomorrow, the government will say that it has decided against imposing a higher minimum repayment percentage. The minimum repayments will be changed to benefit the consumer but under a more complex formula that is expected to save the typical cardholder £1,100 over the life of their balance.
The government claims that the 75% of cardholders who pay off the total balance on their credit cards each month will not be adversely affected.
“We have agreed with the card companies that interest or other fees will not rise for the majority of cardholders as a result of these improvements for other cardholders,” said a spokesman for the Department for Business, Innovation and Skills, which conducted the review.
Credit card rates have been soaring over the past few months, however. Despite the Bank of England’s base rate being at 0.5%, average credit card interest rates have risen to 18.8%. The last time interest rates hit today’s levels was in 1999, when the base rate was 6%.
Experts have claimed that the rise is a result of increases in the number of people defaulting on credit card repayments, but that tighter government regulation is also a factor. It has been anticipated that further regulation could push up rates again or cause card companies to reintroduce annual fees on cards, a practice that is now rare.
The changes to credit card practices are part of a package of measures to help alleviate indebtedness, which the prime minister will announce in full tomorrow.
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Gordon Brown misses his Rosebud moment as publisher shelves study
Mar 13th
Suzie Mackenzie shadowed PM for most of his period in No 10 but believed her book should also cover election
An in-depth and intimate study of Gordon Brown during the past two and a half years was this week shelved by its publishers, Bloomsbury.
After shadowing the prime minister for most of his period in No 10, the journalist Suzie Mackenzie told the publishers this week she would not be handing in the manuscript to meet their March deadline and Bloomsbury terminated the lucrative contract.
Mackenzie had been due to publish before the general election, but she said she had always told the publishers she believed the book should include time spent with the prime minister during this year’s election.
Mackenzie told the Guardian: “I had said all along I didn’t think it should be published before June because the book should include the election and that’s what happened. That deadline just didn’t feel right. No 10 staff were always extremely helpful.”
A No 10 aide, alluding to the childhood sledge which was key to Citizen Kane’s character, said: “It is very sad. We know she had extraordinary material. Really good stuff about his mother and father and maybe a ‘Rosebud’ moment.”
Mackenzie was picked by Downing Street to write the book after writing an interview with Brown for the Guardian in 2004, which they felt was an accurate representation of his character. She was afforded intimate access and travelled with the prime minister through all the tribulations of his premiership, including the negotiations in the run up to the G20 summit and as world leaders grappled with the economic downturn.
In their spring catalogue the publishers said Mackenzie’s work was going to be the most “definitive” account of the prime minister.
“Mackenzie does not aim to judge his success as prime minister – or, not only that. Instead she produces an extraordinary , multi-faceted portrait of the growth – political, intellectual, psychological – of Britain’s most intriguing politician.”
After Mackenzie indicated she was not going to be able to meet the March deadline, Bloomsbury were said to be further concerned when her material appeared to have been plundered by the publication of Andrew Rawnsley’s book, The End of the Party, and the prime minister appearing on Piers Morgan’s ITV chat show.
Downing Street has already been in touch with Mackenzie to ask what she intends to do with the material and she is reported to have said she has no plans until after the election.
Two weeks ago Mackenzie went public with a recording of Brown’s foreign policy adviser Stewart Wood, which supported Rawnsley’s allegation – at that time being rubbished by Downing Street – that Brown intimidated staff. Mackenzie’s recording featured Wood saying Brown has once pushed him aside on the stairs inside No 10.
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Entente cordiale: Sarkozy speaks warmly of Brown at Downing St
Mar 13th
French president says Britain needed ‘bang in heart of Europe’ and tells Cameron he doesn’t understand Tory euroscepticism
Coming from opposing ends of the ideological spectrum, Nicolas Sarkozy and Gordon Brown aren’t supposed to be political brothers in arms.
However, at a Downing Street press conference yesterday the French president chose to lavish praise on the prime minister, coming close to siding with him on the issue of Europe and saying Britain was needed “bang in the heart of Europe”, while expressing regret at David Cameron’s decision to quit the European People’s Party.
“If you ask me whether I would prefer the Tories to remain within the EPP, the answer is yes. The EPP is a good bunch of people. Opening up to others is a very good thing,” Sarkozy said.
He went on to meet the Tory leader later at the French ambassador’s residence in London, but the Conservatives said he only pressed the point of their decision to quit the EPP in passing. The meeting between the two sides had been very warm, the Conservatives said.
Brown and Sarkozy said they had made progress on bridging their differences on the future regulation of off-shore hedge funds, and they hoped a compromise agreement on a directivecould be reached in time for an EU finance ministers meeting next Tuesday.
The Americans are opposing adirective that means US hedge funds – or funds operating from London, but registered for tax outside Europe – would need authorisation from each of the EU countries. Sarkozy spoke warmly of the prime minister, saying: “I have found in Gordon Brown a convincing and convinced reformer, and hand in glove we have tried to find the right answers when the economic and financial crisis almost swept us all away.”
He added: “I know we have differences: he is British and I am French. He is a socialist and I am not. That is not as serious as the first point. We have always worked in a spirit of partnership and trust.”
The French have been building contacts with the shadow cabinet in a series of meetings, but remain perplexed by Tory scepticism, saying they cannot find the intellectual basis for this criticism.
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Nicolas Sarkozy and Gordon Brown hail ‘entente formidable’
Mar 12th
Two leaders stress need for close co-operation to stay ‘bang in the middle’ of Europe
Gordon Brown today described Britain’s alliance with France as an “entente formidable” as he and Nicolas Sarkozy stressed the need for close co-operation and to stay “bang in the middle” of Europe.
Speaking at a press conference after a working lunch at Downing Street today, the two leaders highlighted close political alignment on a number of policy fronts as the prime minister described relations between the two countries as “greater now than at any time since the second world war”.
Brown said he and Sarkozy were in “harmony” over the need to introduce a tax on banking transactions as he revealed that a report on the levy is due “in the next few weeks”.
As well as on the economy, the two countries were working “more closely than ever” on environmental, energy and security matters, he said.
This included putting nuclear power at the heart of tackling climate change.
In his first visit to Downing Street since 2008, Sarkozy echoed the view that it was essential Britain remain “bang in the middle” of Europe amid concerns that a Tory government may engage less enthusiastically with Europe under David Cameron.
Sarkozy insisted he was not in Britain to “play politics” ahead of the forthcoming general election but nevertheless made comments that appeared to be aimed squarely at the Tory leader, who he is meeting this afternoon.
“I remain convinced that the position of our British friends is bang in the middle of Europe. We need you,” the French president said.
Sarkozy said he “regretted” Cameron’s decision to pull the Tories out of the centre-right European People’s party grouping in the European parliament.
The two leaders used their press conference to reveal that work on a banking levy was progressing as Brown pointed to Japan’s recent decision to come out in favour of such a move.
“The banks are organised at a global level now,” said the prime minister. “Their global contribution to society has to be measured in some way. I cannot have one set of banks undercutting another set of banks by moving from one country to another as tax havens or regulatory regimes make it too easy to pay any taxes at all.
“The global financial levy is something that is not only on the agenda but will be subject to a report that will appear in the next few weeks and I believe that the French and British positions are entirely in harmony on this and we can move forward on this.”
He said Britain’s alliance with France was a partnership for the future.
Both were worried about the fragility of the economic recovery, he said, so had agreed to maintain the economic stimulus, “to stick to the course” in their determination to create high global growth.
But he stressed the need for “more global co-operation” in the G20. This should comprise “more determination, more consistency and more speed”.
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So it’s Sarah Brown v Samantha Cameron | Alexander Chancellor
Mar 12th
Will the leaders’ wives really bring their husbands electoral popularity? I’m not so sure
So now Samantha Cameron is to be let off the leash – or maybe dragged unwillingly out of the kennel – to play her part in the election race. “You are going to see a lot more of her on the campaign trail,” her husband told Alan Titchmarsh in a television interview on Wednesday, “so Britain get ready!” It was nice of David to warn us, but he really didn’t need to. It always seemed probable that the engaging Mrs Cameron would at some stage be press-ganged into political service; but as her husband’s lead in the polls began to shrink and the prospect of a hung parliament (or even, God forbid, of another Labour victory) started to loom ominously on the horizon, it became inevitable.
David Cameron must realise that his personal appeal to the electorate is in decline. Even his charm has begun to arouse suspicion. Could it be masking the fact that he is actually no more than a clever smoothie on the make? Could he be just a cynical “Tory boy” at heart? He knows he needs “humanising”, and the only person in a position to do this plausibly is his wife. Sarah Brown has shown the way by seeking to persuade the public that her dour husband is not just consumed by personal ambition, but is a warm-hearted, high-principled old buffer. “I know he’s not a saint,” she told the Labour party conference last autumn. “He’s messy. He’s noisy. He gets up at a terrible hour. But I know he wakes up every morning and goes to bed every evening, thinking about the things that matter. I know he loves our country.”
Asked by Titchmarsh to give a description of himself, Cameron said he was a “young guy” who was passionate about his country, cared for his family, and was relaxed, normal and reasonable (unlike Gordon Brown, by implication). Samantha’s job will be to convince people that David is not only young, relaxed etc, but also a steadfast man of character, as in Sarah Brown’s depiction of her husband. And her first attempt to do so will be made this Sunday, when she is to be interviewed on television for the first time during an hour-long profile of the Tory leader by Sir Trevor McDonald. In one sentence leaked in advance, she speaks of their 18-year relationship and says: “I can honestly say that I don’t think in all that time he has ever let me down.” That is a rather puzzling claim, but its implication is presumably that he would never let the British people down either.
While Sarah Brown and Samantha Cameron are both likeable women and potentially more popular than their husbands, it is questionable how useful their support will actually turn out to be. It may well suggest to the public a lack of self-confidence by a party leader to make his wife campaign on his behalf. None of our most successful prime ministers – Winston Churchill, Clement Attlee, Harold Macmillan, Margaret Thatcher, even Tony Blair – have resorted to this tactic. And while Sarah Brown’s professed hero-worship of Gordon may have made an impression on the public, he would appear to have benefited even more from Andrew Rawnsley’s claims that he bullies his Downing Street staff. This suggested a man of rugged, independent spirit, and Brown himself has tried to build on this idea by saying in a speech this week that the test of a leader was “whether you have a clear idea of what you want to do, whether you are determined to push that through, and whether you are sufficiently impatient and strong-willed to push aside the barriers that stand in your way”. Rawnsley may have done more to narrow Cameron’s lead over Brown than any of Sarah’s talk of his lovability. People don’t necessarily want their leaders to be lovable. Margaret Thatcher was never thought lovable, but that didn’t stop her winning election after election.
There is no sign yet that Nick Clegg, the leader of the Liberal Democrats, will seek to exploit his wife Miriam in this way, which is perhaps not surprising, given that she is both Spanish and a Roman Catholic. But it may all the same work to his advantage in the election that he, alone among the main party leaders, won’t seem to rely on the endorsement of a spouse to commend himself to the electorate. In this respect Clegg, who has Dutch and Russian ancestry, is more typical of continental politicians, for they don’t feel the need to enlist the political support of their wives. Of course, if you were Silvio Berlusconi, you wouldn’t want to, since his wife Veronica Lario is divorcing him because of what she has called his tendency to “consort with minors”. Similarly, you wouldn’t really expect Nicolas Sarkozy to rely on the advocacy of Carla Bruni, who even now won’t confirm that her marriage to the French president is “for ever”.
Sarkozy has a habit of marrying beautiful but independent-minded women, not the sort that a politician would necessarily invoke as witnesses to his solid, bourgeois virtues. But he probably regards the fact that such women are drawn to him as in itself an electoral asset. Berlusconi also hopes that his interest in young women will be both understood and approved by Italian voters, and the indications are that he is probably right. I wonder how British voters would react to an openly philandering party leader. It is just conceivable that they would respect him for his honesty.
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Lehman Brothers bosses may face court for accounting ‘gimmicks’
Mar 12th
• Former chief Dick Fuld and accountants Ernst & Young criticised in 2,200-page report
• Claims that buyer Barclays received assets it was not entitled to
• Fuld tried to involve Gordon Brown to fast-track Barclays rescue
A court-appointed US bankruptcy examiner has concluded that there are grounds for legal claims against top Lehman Brothers bosses and auditor Ernst & Young for signing off misleading accounting statements in the run-up to the collapse of the Wall Street bank in 2008 which sparked the worst financial crisis since the Great Depression.
A judge last night unsealed a 2,200-page forensic report by expert Anton Valukis into Lehman’s collapse which includes scathing criticism of accounting “gimmicks” used by the failing bank to buy itself time. These included a contentious technique known as “repo 105″ which temporarily boosted the bank’s balance sheet by as much as $50bn (£33bn).
The exhaustive account reveals that Barclays, which bought Lehman’s US businesses out of bankruptcy, got certain equipment and assets it was not entitled to. And it reveals that during Lehman’s final few hours, chief executive Dick Fuld tried to get Gordon Brown involved to over-rule Britain’s Financial Services Authority when it refused to fast-track a rescue by Barclays.
With Wall Street shaken by the demise of Bear Stearns in March 2008, Valukis said confidence in Lehman eroded: “To buy itself more time, to maintain that critical confidence, Lehman painted a misleading picture of its financial condition.”
The examiner’s report found evidence to support “colorable claims”, meaning plausible claims, against Fuld and three successive chief financial officers – Chris O’Meara, Erin Callan and Ian Lowitt.
Valukis said the bank tried to lower its leverage ratio, a key measure for credit rating agencies, through a device dubbed “repo 105″ through which it temporarily sold assets, with an obligation to re-purchase them days later, at the end of financial quarters in order to get a temporary influx of cash. Lehman’s own financial staff described this as an “accounting gimmick” and a “lazy way” to meet balance sheet targets.
A senior Lehman vice-president, Matthew Lee, tried to blow the whistle by alerting top management and Ernst & Young. But the auditing firm “took virtually no action to investigate”.
During the bank’s final hours in September 2008, Fuld tried desperately to strike a rescue deal with Barclays but the FSA would not allow the British bank an exemption from seeking time-consuming shareholder approval. The chancellor, Alistair Darling, declined to intervene and Fuld appealed to the US treasury secretary, Henry Paulson, to contact the prime minister.
“Fuld asked Paulson to call prime minister Gordon Brown, but Paulson said he could not do that,” says the examiner’s report. “Fuld asked Paulson to ask president Bush to call Brown, but Paulson said he was working on other ideas.”
In a “brainstorming” session, Fuld then suggested getting the president’s brother, Jeb Bush, who was a Lehman adviser, to get the White House to lean on Downing Street.
Barclays eventually bought the remnants of Lehman’s Wall Street operation from receivership for $1.75bn – a sum that has enraged certain bankruptcy creditors who believe it was a windfall for the British bank.
The examiner’s report finds grounds for claims against Barclays for taking assets it was not entitled to, including office equipment and client records belonging to a Lehman affiliate, although it says these were not of material value to the deal – the equipment was worth less than $10m.
A lawyer for Fuld last night rejected the examiner’s findings. Patricia Hynes of Allen & Overy said Fuld did not structure or negotiate the repo 105 transactions, nor was he aware of their accounting treatment. She added that Fuld “throughout his career faithfully and diligently worked in the interests of Lehman and its stakeholders”.
A spokesman for Ernst & Young, which is headquartered in London, told Reuters the firm had no immediate comment because it was yet to review the findings.
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The bankers lied. And Darling, a mere puppet on their string, knows it | Simon Jenkins
Mar 11th
Britain has paid a horrific price for allowing the City to dictate credit policy. Yet there is no inquiry, no questioning, only silence
Still no inquiry. Still no answers. A trillion pounds has been devoted over the past 18 months to protect Britain’s financial system from alleged Armageddon, with not a murmur of value for money. This stupefying sum is more than has ever been spent on any project by any government in British history.
We know where the money came from but we do not know if it was necessary, nor who now has it. We know only that, a year on, Britain is experiencing a worse recession than any comparable country. The lack of accountability, the sheer lack of curiosity from the political community, is amazing.
The nearest to an explanation came from the man responsible, Alistair Darling, on Michael Cockerell’s recent BBC documentary on the Treasury. If he had not acted in October 2008 as he did, Darling asserted, “the bank doors couldn’t have opened, cash machines wouldn’t have functioned. All over the world people wouldn’t have got money”. Who says?
The reality is that at the time, a year after Northern Rock and with Lloyds/HBOS and RBS faltering in the wake of the Lehman Brothers collapse, Whitehall was in policy turmoil. Every option was in the air. Darling and his patron, Gordon Brown, were in perpetual conclave with advisers such as Lord Myners and Lady Vadera and Downing Street’s “UBS mafia”. Calls were coming from important City figures saying such things as, “We can’t go on beyond lunchtime … Give us the money”.
Faced with a global asset bubble of some $290 trillion about to burst, a frantic Darling started throwing millions, then billions, then a trillion at underpinning the banks’ near worthless “casino” debts. He never spent such money on indebted homeowners or indebted manufacturers or indebted African states. He did it to banks because they told him they were too big to fail. Advised by bankers, surrounded by bankers, obsessed with bankers, Darling paid.
I would like to know why. Ask those involved and they go wide-eyed and mutter “Armageddon”, rather like Tony Blair explaining the Iraq invasion. To these people, not letting banks fail was not an option but a creed. They cannot explain what is “wrong” with taking hold of a reckless bank in trouble, guaranteeing its deposits (and cash machines) and continuing to lend against a Treasury guarantee, while dumping the casino activities into administration. Shareholders lose out, but that’s capitalism. Talk of bank doors closing is rubbish.
Andrew Ross Sorkin’s Too Big To Fail, the chaotic but gripping saga of September 2008, tells of Wall Street and Washington playing with the “good bank, bad bank” option over and again. At one point Lehman’s toxics were to be hived off into a SpinCo (dubbed ShitCo by Wall Street). It did not happen, but a version was tried at AIG. In Britain in 2007, Northern Rock was both nationalised and reorganised on a good bank, bad bank basis. The good bank reported this week, and should soon repay the taxpayers their investment. The policy worked.
So why were RBS and Lloyds/HBOS not fully nationalised, rather than given unconditional largesse? Speaking at this year’s Spectator lunch, Darling boasted that “I own four banks”. They appear to own him. They assured him they would use his money to lend to businesses and homeowners to avert recession. They lied and Darling knew it. He knew his money would disappear into underwriting the banks’ casino debts and overheating the stock market.
By December 2009, a year after the bailout began, bank lending was not stagnant but declining at an unprecedented rate. Still Darling did not relent. Indeed he made lending harder by increasing VAT, reducing high street demand and rendering commercial lending more, not less, risky. Meanwhile the Bank of England poured cash into bank balance sheets. An Economist headline put it pithily: “Banks fine: pity about the customers.”
Darling did not even require banks to curb their extraordinary bonuses, even when they consumed a large share of reported losses. The American financier, Warren Buffett, famously protested that banks were “being run for their employees… with lucrative paydays that enriched people who are not particularly intelligent and add little value”. Since he claims to own them, Darling might at least explain why he was further enriching them at public expense.
Last year John McFall, the Labour chairman of the Commons treasury committee, argued for a “state bank”. There were four already, but economically inert. When RBS returned to the casino tables, the money it spent was draining from the real economy in Darling’s repeat of the Thatcher/Howe recessionary squeeze of 1980-81. At a time when consumer demand was collapsing, the government found itself unable to respond with more VAT cuts, pensions bonuses, higher social security and more public projects, in other words a classical Keynesian answer to a slump.
That is what Germany and many far eastern countries did, with benefits rises, tax holidays and consumer scrappage schemes. The British government did the opposite. It ended such schemes, increased VAT and made deep cuts in government (which means also private) spending. Small wonder one in four high street stores might be facing closure – but no more banks. Darling continued to claim that his printing of new money through quantitative easing was aiding business. Yet each week the financial pages reported how the extra money was evaporating, most of it disappearing overseas. It would have been better to adopt the old monetarist answer to recession, of dropping bank notes on shoppers from helicopters.
I appreciate there may be arguments against this analysis, but it would be good to hear them. Why did Darling not let HBOS or Lloyds fail, merely guaranteeing their deposits? Alternatively, why did he not nationalise and split up the ailing banks in October 2008? Again, if they really were too big to fail, as they alleged, why has he not made them emphatically smaller, so when they fail next time they do not drag the economy down with them?
Gillian Tett’s book on the psychology of credit greed, Fool’s Gold, shows the corrupting effect of unfettered derivatives trading on the whole financial system. Darling has done nothing to mitigate that effect. The world is alive with talk of curbs on bonuses, hedge funds, short trading, proprietary dealing and transaction taxes. There is talk of stress tests, living wills and higher reserve ratios. In almost all these arguments, Labour ministers are on the side of unregulated banking and against further controls. They are the wildest of free-marketeers. Brown and Darling have gone native and become puppets on a banker’s string.
Britain has paid, and will go on paying, a horrific price for this government allowing bankers to dictate credit policy after 2008. To avoid ministers suffering the ideological odium of proper nationalisation (as opposing to bailing-out), Britain is being forced to lose jobs, firms, infrastructure, prosperity and the happiness it brings.
Too big to fail has taken a savage toll on the economy. If it was worth it, I would like to see the account. If not, someone should pay. Yet because the policy was backed by all three main parties, there is no questioning, no inquiry. All is silence.
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Catherine Bennett | Talk to us about politics, not your lovely home life
Mar 14th
Posted by Catherine Bennett in Politics
No comments
The Cameron and Brown personality parade misses the point that voters care about issues, not character
Recently, on a day when no cameras were looking and he was surrounded by political nonentities, mainly mothers, an off-duty David Cameron was amazingly haughty to a friend of mine. Maybe it was just an off-day. Or maybe, what with all the nation’s mums to think about over, a stressy Mr Cameron had important political things on his mind. What do mums feel about Lily Allen? Would they like him to drink Guinness or bitter? Enjoy gardening or football? Shopping-wise, which out of Primark and Marks & Spencer do mums think more appropriate for a national leader? Examined by Titchmarsh, he came out for the latter.
Lucky Gordon Brown: though pressed on his retail experience by an insistent Piers Morgan, he was never forced to admit to a supermarket preference. But the prime minister confessed, and a cutaway to smiling Sarah Brown confirmed that this was a positive anecdote, that he once accompanied his wife to a supermarket, but stayed in the car.
Admittedly, it’s unlikely she would have stood up and added that they were not, at the time, on speaking terms. We just have to take Brown’s uxoriousness on trust, like his grumpiness-denial and a claim that he once drank “half-a-dozen” pints a night. Are there any witnesses to this excess? The more political parties urge us to go out and vote on the basis of their leader’s characters, the more, if they want to avoid complicity, broadcasters might want to think about testing these auto-eulogies for accuracy.
Does Cameron really play darts? Does Brown, yet more implausibly, never throw anything more substantial than newspapers, and “wake up in the morning thinking what I can do to help people looking for jobs”? Stringent investigation of these claims could provide fabulous light entertainment. Although, inexplicably, waterboarding has yet to feature on daytime television, Jeremy Kyle routinely uses a lie detector to expose disingenuousness, even though all that is generally at stake, for survivors, is not a position at the helm of government, but a chance to “save your relationship”. Once Brown and Cameron were wired up they could even be asked a few supplementaries, about banking regulation, or the size of coming cuts.
Last week, invoking the more urgent electoral issue of himself, Brown gave voters a few tips for personality assessment. “It is for other people to judge,” he said, “but I believe that character is not about telling people what they want to hear but about telling them what they need to know.” And another hint, to help the public succeed where generations of divorcees have failed: “For better or for worse, with me what you see is what you get.” But like a Cretan, who thinks it worth adding, “just ask my wife” to the line “all Cretans are liars”, Brown accepts that the public might, occasionally, feel the need for corroboration.
Over to Sarah Brown. “What you see is what you get with him,” she said, in response to the bullying stories. A comment which only confirms, like an earlier line, “I know he wakes up every morning thinking…”, that here is a couple so close that their “mirroring” has reached the exemplary, automatic stage.
Even so, it’s worth noting Mrs Brown was not speaking under oath. Here is a loyal spouse who stands to be evicted, if she is disbelieved, then rehoused in Kirkcaldy; albeit with support from Naomi Campbell. Nor, perhaps, should the cautious voter believe in Samantha Cameron’s purported diffidence about Number 10, on the basis that she is already a rich baronet’s daughter and a big name in the world of handbags. She still wants to win enough to deploy her children and, in tonight’s profile of Cameron by Trevor McDonald, to throw down this gauntlet about her own Mr Wonderful: “He’s always been incredibly strong, and kind, and supportive.” How do we know this is true? Because the rules of all-political Mr and Mrs now require that candidates provide character references for the wives, as well as themselves.
Dave guarantees, in Samantha, “an amazing woman, a working mum, a very successful career woman” – so a leetle bit more modern, maybe, than Gordon’s “beautiful, elegant, compassionate, dignified” Sarah. Whom he proposed to on a beach. And loves ever so, Piers: it “just grows and grows”. Will he be sure to tell us if it stops? “I’m an open book as far as people are concerned,” Brown says. “Anything they want to know, I’m happy.” Actually, politics aside, it’s hard to think of anything he’s left out. Most of us probably know more about Sarah Brown’s proposal of marriage than we do about our own mother’s.
Presumably, given there has never been disclosure on this level, that the media did not demand it and that no one in their right mind would volunteer such intimacies, Brown and Cameron’s advisers believe that a public hardened by tales of Prescottian bulimia and Mrs Blair’s neglected Dutch cap will respond only to enhanced levels of authenticity stimulus. Heath’s yacht, Mrs Thatcher’s larder and Kinnock’s Welsh idyll have given way to a televised account of his baby’s final moments by Brown, a father who thereby enters an almost obscene contest for public sympathy with his rival, another bereaved father.
On each side, the strategy looks as risky as it is undignified. Their particular brands of insincerity – agonising awkwardness in Brown’s case, supreme smarm in Cameron’s, phony WAG stuff from both – could easily be the strongest impressions created by protracted exposure. More important, this belief in the electoral power of character may be misplaced.
Evidently Brown and his manipulators have evidence, or instincts, that tell them the contrary, but there are doubts about the significance of leaders’ characters in elections, even in an age when it is common to argue that presidential politics and a celebrity-obsessed media have increased their impact. And it is not, anyway, as if charismatic politicians are new. Winston Churchill was a celebrity, and he was rejected. So was Neil Kinnock, even though he was more appealing than John Major. Look at Berlusconi’s behaviour, and you could even argue that voters don’t pay as much attention to character as they should.
Concluding a 2002 study, Leaders’ Personalities and the Outcomes of Democratic Elections, the psephologist Prof Anthony King said the conventional political wisdom on character is wrong. Research, he wrote, “indicates that relatively few voters are swayed by candidates’ personal characteristics”. So Brown musn’t worry about being snubbed by Match of the Day.
“Far more important,” King writes, “are voters’ long-standing party loyalties, their views on issues, and their judgments of how well or badly presidents and parties have performed – or will perform – in office.” Ah. Maybe, given the economic tumult Mr Brown has just prophesied, it is a bit early to give up on football. Any port in a storm.