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 Cross-party consistency
Originally posted on Planet Politics by Stuart Winton and reproduced here with his kind permission While the prime minister himself may have failed to acknowledge any blame for the credit crunch and subsequent financial crisis, surely only the most Brown-nosed of his supporters would consider his economic management to have been totally beyond reproach. While the problems didn't originate only in the UK, Gordon Brown cannot totally escape censure for his stewardship of the economy while chancellor of the exchequer, which helped contribute to the consequent world-wide crisis - the lax financial sector regulation, the emphasis on controlling consumer price inflation while ignoring asset prices, his contorted and eventually abandoned Golden Rule on fiscal policy, the "prudence with a purpose" soundbite which turned out to be anything but, and all neatly encapsulated in his one-time but now risible boast to have "abolished boom and bust". But would the Tories have done any better? Well, self-evidently not in view of David Cameron's decision earlier this year to apologise for the party's failure to hold the Labour Government to account for its handling of the economy. And in the Scottish context Alex Salmond said, a year before the Brown stuff hit the extraction device: "We are pledging a light-touch regulation suitable to a Scottish financial sector with its outstanding reputation for probity, as opposed to one like that in the UK, which absorbs huge amounts of management time in ‘gold-plated’ regulation." Thus it seems unlikely that an independent Scotland would have fared much better than the UK has; indeed, given the financial resources needed to bail out RBS and HBOS we might well have ended up as a mere intangible asset on Qatar's balance sheet as opposed to our current status as a 'colony' of England. Of course, this blog has been here before. Except for the elephant in the room, namely Lib Dem economic guru Vince Cable - at least one of the major parties would have kept the economy on an even keel if they'd been at the UK economic helm. But would they? Perhaps not - a recent article in the New Statesman demonstrates that Mr Cable had a distinctly Salmondesque approach (well, they are both economists!) to financial regulation in an earlier life prior to his elevation to the status of Westminster economic oracle: Then there is the matter of City regulation. It was, in the words of the Nobel Prize-winning economist Paul Krugman, the "zeal for deregulation [that] set Britain up for a fall". Weak regulators allowed reckless bankers to take enormous risks with astounding sums of money. So one might have expected Cable the political prophet to have been arguing consistently for better, firmer and stronger regulation of the City from the outset. On the contrary, in June 1999, speaking in a Commons debate on the Financial Services and Markets Bill, Cable endorsed "the liberal market" approach to the regulation of financial services. "No one," he said, "is arguing for an increasingly severe, more onerous and dirigiste system of regulation." Any regulation, he said, should be "done on a light-touch basis". A decade on, once again with the benefit of hindsight, Cable calls for "radical safety measures" to be built in to a new regulatory architecture for the City. But this is too little too late. You cannot advocate light-touch regulation on the floor of the Commons but then, a decade later, pretend you were ahead of the curve in predicting the ensuing financial crash. So there we have it - the blind* leading the clueless, the delusional and the partially-naked emperor. *In the spirit of this blog's avowed aim to avoid ad hominem attacks, this particular word is used figuratively rather than literally! Due to problems with spam only SalfordOnline members can now leave comments. Becoming a member of SalfordOnline only takes a minute, just hit the red Join Us button at the top right hand side of the page to create your Personal account. |
