Mark Field MP has already warned about the consequences of banning bonuses for those bank employees who are expected to lead the sector back to health. Lord Forsyth uses an article in today's Telegraph to warn of other dangers, including the worry that Labour might use its nationalisation of many of our banks for its own political purposes:
"The Government says it has no wish to interfere in the way they are run. If the banks are to be returned to health – and to private ownership – then there must be no political interference. Yet the Government is putting its representatives on bank boards, demanding that banks maintain 2007 levels of lending to homeowners and small businesses, putting caps on directors’ pay and hinting that it will intervene to halt repossessions. That’s already quite a lot of interference to be getting on with. With Labour behind in the polls and an election coming up, can we be sure ministers will not be tempted to meddle a lot more? What safeguards will Labour offer to ensure it does not use the nationalised banks for its own ends?"
It's a timely warning. Michael Forsyth worries that the devil is in the detail of the bank recapitalisation programme but (as Greg Hands MP has noted) Parliament still hasn't had proper opportunity to debate the terms of the Brown-Darling plan.
"What safeguards will Labour offer to ensure it does not use the nationalised banks for its own ends?"
Hopefully none. This is *exactly* what Labour should be doing.
Hey I read a piece just last night about the proposed re-instatment of clause four.
Then I woke up! :D ;)
Posted by: comstock | October 25, 2008 at 11:35
Just to add that I think the following is an awesome idea
" and hinting that it will intervene to halt repossessions."
If the founding fathers of the Labour party are looking down now, they would be screaming 'do more than hint- do it!'
Forgive my OTT enthusiasm, but this type of thing is exactly what Labour was set up to do, and this has left me quite excited about government policy for the first time in ages.
Posted by: comstock | October 25, 2008 at 11:52
Comstock, If this is what you want then you should be very careful. At the very least you must ensure you belong to 'the Party', so you can be a beneficiary of their patronage, rather than a target of their disapproval.
This sort of interference - beyond that necessary for the protection of the monetary system - perfectly illustrates how Corporatism works, only the single source of power and patronage will be 'the Party'.
If they start forcing the banks to operate and lend to those the government thinks worthy, then more distortions will simply build in more tension leading to a further bust later in the day.
Posted by: Promise of Avalon | October 25, 2008 at 12:51
Interesting choice. In The Daily Telegraph today, you had a choice of another four articles to review, most critical (and some highly critical) of the Tories and the ruling elites generally - one declaring: "There has been a wholesale collapse of authority and competence in our ruling elite...".
Those articles include this one, this, this and this.
You chose the least prominent and the one least critical of the Tories. Do I sense that this blog is floating in that North African river?
Posted by: Richard North | October 25, 2008 at 13:45
Yes, the bankers have shown they know what they are doing. Now we've bailed them out, let's leave them to it, eh?
Of course the government should have a say in running the nationalised banks! What's the point in having taxpayer's money in there if there is no one looking out for the taxpayer's interests? My goodness -putting caps on directors' pay - that's really not one. What would David Cameron say - oh, he agrees.
Posted by: resident leftie | October 25, 2008 at 23:04
Posted by: comstock | October 25, 2008 at 11:52
Much as I agree with everything you've said may I, in a comradely way, beg you to refrain from using "awesome" in that American fashion?
Posted by: resident leftie | October 25, 2008 at 23:06
I am glad you are so sanguine resident leftie @ 23.04 at how well the taxpayers money will be looked after with a government individual, and therefore more government involvment/control in each bank.
Would you say that the government has 'looked after the tax-payers money' during the last eleven years? Yes, I am sure that YOU would, but the records show differently!
Posted by: Patsy Sergeant | October 26, 2008 at 10:58
"Just to add that I think the following is an awesome idea
" and hinting that it will intervene to halt repossessions."
If the founding fathers of the Labour party are looking down now, they would be screaming 'do more than hint- do it!'"
How is the government to recover our money, then? As it happens, nationalised Northern Rock seems to be the most aggressive of all the lenders in taking possession proceedings.
Posted by: Sean Fear | October 26, 2008 at 12:54
Posted by: Sean Fear | October 26, 2008 at 12:54
How is the government to recover our money, then? As it happens, nationalised Northern Rock seems to be the most aggressive of all the lenders in taking possession proceedings.
It has poor quality 125% loans instituted by its greedy and short-sighted private managers, so that's not surprising. In fact, Nothern Rock is a good example of how effective a govnernment remit can be. Its job is to repay the public purses loan. It's repaid 14bn of the 26bn already.
Personally I think they should go easier on the repossessions, but that's not the remit.
Posted by: resident leftie | October 26, 2008 at 23:08