TALKING TO MINISTERS since the crisis began has been a disorientating experience. On the one hand, I admire them for keeping their composure under fire as they deal with a national emergency. On the other, there always comes a point in the conversation when my jaw hits the floor.
“What reforms are you going to impose on the banks,” I ask in effect.
“Oh none,” they reply.
You cannot understand their insouciance unless you grasp how in love they are with the world we have lost. They think they can put Humpty Dumpy back together again, and go back to the days when Labour was winning elections, the City was roaring, the house market was booming and tax revenues were flooding in to fund ministers’ vast social engineering schemes.
It is the nostalgia for the bubble which prevents them behaving like true social democrats. (That and the fact that their generous salaries and lavish expenses fiddles shield them from the rage which is sweeping working- and middle-class Britain.) When I put it to one that we needed to stop high-street banks playing at the casino tables of global capitalism, he wouldn’t hear of it. Despite the banks wasting tens of billions of tax-payers’ money and placing hundreds of thousands of jobs at risk, there would be no British version of Roosevelt’s Glass-Steagal Act Like Herbert Hoover after the Great Crash of 1929, they would stick with light-touch regulation. Labour, I was told, did not want mortgage rationing and young couples saving for deposits that Rooseveltian controls on banks would lead to. The debt must start flowing again, just like in the good old days. It was no good my pointing out that the policies of the good old days have taken our country to the brink of ruin, and incidentally, stopped the flow of credit to young couples.
They didn’t want to know and perhaps are so constrained by old ideologies that they cannot want to know. Hence the only reform Gordon Brown is offering is a ban on 100 per cent mortgages. (As no bank or building society is offering 100 per cent mortgages at the moment, this is about as useful as a Brown ban on unicorns or the man in the moon.) Realise that Labour is now the party of the status quo ante, and today’s Today programme begins to make sense. At the time of writing, the media has not picked up on how extraordinary its interviews were, but I hope that after reading the above you can.
Scroll down and listen to Alistair Darling at 0734. He sticks to the script and says there will be no fundamental change in the banking system.As Robert Peston soberly explained yesterday Darling is presenting the public with the argument that Labour’s “sanitisation of financial globalisation [now] explicitly requires us to be happy as taxpayers to underwrite global banks that call themselves British, even though we as taxpayers would have only modest influence on the rules constraining the behaviour of those British global banks.”
Then go down to George Osborne at 0810. The Tory spokesman – that’s right the Tory – is talking about fundamental reforms of banks that are not only “too big to fail” but, as he nicely put it, “too big to bail out.” If this isn’t spin, then as things stand the Conservatives are the inheritors of FDR and Labour is the descendant of Herbert Hoover.