Tag Archives: gordon brown

The banking system: lessons from my childhood

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One of the questions on Politics Home this morning (I am a panel member of this daily tracker of opinions political) was do I think the banks should go back to a separation between our old safe, solid high street retail bank – and the speculative, take risks, make loads of dosh type investment banks?

Yes I do! I can remember being absolutely irate when our reliable, responsible banks were freed of such regulation and zoomed off to the realm of the speculative. I was upset because I liked slow and steady.

Perhaps this was because of a salutary experience I had about risk and loss. I had a very early example in my life of the dangers of the offers of a higher return on savings than the norm. In the flats where I grew up was a young financial buccaneer. He had his own merchant bank at the age of about 23 and all the families who lived in the block thought he was just the bees knees. All our families had seen this man grow since he was a little boy – and so when he had his bank all set up – he went and sought investment from lots of people who lived there – friends and neighbours. Many of these ‘investors’ were coming to the end of their working lives and I guess the offer was too good. I don’t know too much about the rates etc as I was a teenager at the time and not much interested in boring things like investment.

Anyway – however ridiculously high the promised return was – I expect a mixture of hope and trust and familiarity persuaded quite a few of the residents to place their life savings with this young man.

Of course, like all morality tales, this ended badly for these trusting folk – and all their money was lost. And the moral of the story was if it looks too good to be true etc.

The young man went to prison for about six years I think – so justice was done – but quite a few properly lived lives were ruined. These were not rich people – just people who had worked all their lives and put away their savings. They may have made a mistake in putting too much money with one person – but it was a harsh, harsh penalty for that.

Anyway – that was a merchant bank and therefore it was ‘buyer beware’. But when our safe, high street banks, changed into risk-takers – I guess many people didn’t really understand that they could play fast and loose with our money the same way investment banks could and did.

For those of us who had to literally beg for our first mortgages – when it was a case of being judged suitable to receive a loan on the basis that you would be capable of paying it back – the idea of a 100% or 125% mortgage is inconceivable as a model.

Were we, the population, collectively guilty of partying thinking we wouldn’t get a hangover? Maybe a bit – but if we thought the party would never end – it’s because the banks and the Government led us to believe that was the case. We couldn’t imagine that banks would be allowed to behave that way – let alone with the tacit encouragement of the Chancellor latterly Prime Minister.

But I think we relied on the banks to know what they were doing in the way they used to. If they said we could borrow like there was no tomorrow – live now and pay later – then there couldn’t be a problem with it. The banks led us up the garden path (albeit we were happily led) and now we find they were full of avarice and greed.

So when Gordon yesterday talked about a return to the separation of banks back to the old style high street banks – he is right but how dare he not accept or understand that it was under him that this dangerous financial model was given license and bred the monsters who have led to such a downfall. And yes – Gordon – it may be a global financial downturn – but the seriousness of our situation is laid at your door. No one else’s.

I can’t help feeling sorry for the prudent in all of this. Yes – of course those who suffer direct hits on job and home are first in line for help. But what about all those older people who supplement their meagre pension by the interest paid on a lifetimes work savings? As Vince Cable (Lib Dem Shadow Chancellor) says – time for thrift and sensible behaviour. But we need some assurance that thrift and sensible behaviour will be rewarded – not punished – as is currently the case. Now – there’s a novel idea!

One new President, one expenses u-turn

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Now you see it – now you don’t. Clearly Gordon Brown saw the writing on the wall in regard of the Freedom of Information vote on MP’s expenses. At PMQs he refused to back down – then after PMQs he backed down.

It’s bad enough that the economy is in meltdown – but at such times we are disappointed to find that we have not got a serious man for serious times – we have a rudderless boat!

Still – Labour would have lost the vote. I wish the vote had gone ahead and they had lost – ‘cos would have taught them a lesson. However – given the outcome is the right one – I forgive.

But I really wanted to write something about Obama. I know – everyone has. Every column inch by every writer / journalist etc in the country has more than said it – but the spirit moves me. I thought the fluffing of the lines was just fine. If Obama had clutched his head and said ‘oh my god – what a terrible thing to happen’ it would have been a bit of a gaff but Barack’s talent is knowing just what to do and being unfazed – he grinned. Grinning was the absolute right thing to do!

And it’s his temperament that I admire so much together with his intellect, timbre of voice and use of vocabulary. When I watched the whole speech live I didn’t pick up all the rich phrases at the time – in fact if I had a criticism it would be that there was nothing but rich phrases and well-crafted sentiments. But when I heard parts later on radio and broadcast news – they were all brilliant. How clever is that? ‘Cos effectively that meant whatever part was used by the media – it would make complete sense and convey his message – hope and change etc.

Charisma oozing and charm and talent personified – off he goes to ‘remake America’ and we all wish him well with what lies ahead. Seems to me that what has been revealed about all of us watching is our needy desire to believe and hope for a better future. I’m just glad that we still can believe in change and the better nature and aspiration of man to overcome adversity and triumph! We’ll see. I cry in happy movies too…

The Queen's Speech

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Bizarre in the House today. Having duly trekked from Commons to Lords when summoned by Black Rod for the Queen’s Speech – I managed to get a view of the Queen. And looking around at the tiaras, long evening dresses and the goldest of thrones – whilst I couldn’t see the relevance to anything in the real world – it aint half a sight to be seen.

Later when the House sat, the Speaker made a statement in relation to Damian Green’s arrest. Feelings are running high in Parliament at the fact that the police were allowed in without a warrant – extraordinary. Several members made the point that whilst MPs are not above the law – nor are the police.

It’s quite hard to tell which indignation is real and which manufactured. Was this really about a threat to national security? The leaked stuff we know about would suggest no, but Jacqui Smith seemed to say last Sunday on Marr that there was more – but we just weren’t in the know. Was this authored by senior civil servants? Was it because there was annoyance and embarrassment to the Government or was it a genuine case that the police had to investigate?

Either way – I cannot believe this was the right way to go about things. The public have a right to exepct that information they give to their MP to help with a case will be kept confidential and – just as with other professions – only released to someone else under very clear and strict rules.

As for the Queen’s Speech itself – pretty dull. There was predictably yet another Criminal Justice Bill and Home Affairs Bill. Strangely – there was nothing about housing in the speech at all.

But hey – rabbit out of hat – Brown suddenly announces apropos of nothing that there will be a two year break for people who come upon hard times! So – yes it grabbed the headlines – but no it wasn’t part of the Queen’s Speech – and no there was no information about who would pay!

The roles of Sharon Shoesmith and George Meehan

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On Saturday went on Ken Livingstone’s LBC show.

Most of the time was spent on Baby P, not surprisingly. Just to break for a brief moment from Baby P – Ken said at the end that I could spend the last minute ranting about whatever I wanted. So I did. I made an appeal to Gordon Brown to re-open the sub-post offices in London that he has closed. Having decided to stop any further closures it seems to me that those of us who were unfortunate enough to have had the axe already fall should have the closures reversed.

Back to Baby P – Saturday was the day Sharon Shoesmith received some support in the form of a letter to the media from 61 head teachers in Haringey. Sharon is Director of Education here in Haringey. As Ken put it on air – she’s their boss.

But this isn’t about her competence or otherwise in education – it’s about her responsibility and accountability for the social services side of her brief – which includes having – under the Children’s Act of 2004 – the responsibility for child protection in Haringey. Under this legal framework her and the political leadership side of the equation have the ultimate responsibility.

Whilst she has – rightly – been in the firing line, thus far George Meehan, Labour Leader of Haringey Council, has not had the decency to step forward to take his share of the responsibility. He was leader too during the Victoria Climbie affair – and it is worth remembering some of the damning conclusions in Lord Laming’s report:

The manner in which a number of senior managers and elected councillors within Haringey discharged their statutory responsibilities to safeguard and protect the welfare of children living in the borough was an important contributory factor in the mishandling of Victoria’s case … I was left unimpressed by the manner in which a number of senior managers and councillors from Haringey sought to distance themselves from the poor practice apparent … [The report’s criticisms] are directed not just at the front line staff … but at senior managers and councillors.

Neither George nor any of the other councillors so criticised resigned their posts then.

What Sharon Shoesmith, Geroge Meehan and Liz Santry (the Haringey Council Cabinet member for this area) don’t seem to understand is the really, really deep sense of outrage amongst the public.

One illustration of the depth of public concern and anger over this issue is that in the last week my website has been read more heavily that at any time ever before. My office is inundated with phone calls and emails – all virtually of one voice – how could this happen again in Haringey and this time they must not be allowed to get away with it.

During the time of the Laming inquiry I wrote a newspaper column, quoting Ambrose Bierce – and the quote seems all too apposite once more: responsibility is “a detachable burden easily shifted to the shoulders of God, Fate, Fortune, Luck or one’s neighbour. In the days of astrology it was customary to unload it on a star”. If only it were not so.

Baby P at PMQs

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There was an unedifying spat at Prime Minister’s Questions today between David Cameron and Gordon Brown, which seemed to turn the tragedy of Baby P into a political football. It was just awful to watch.

I didn’t think I’d get the chance to ask a question myself – but just before the end of PMQs, the Speaker called me. I made that point that when Leader of the Opposition on Haringey Council during the Climbie affair I was given all sorts of assurances about how lessons had been learnt, never again etc.

So – whilst the national review Gordon Brown talked about is welcome, it isn’t all that we need. We need an independent public inquiry into what went wrong in Haringey – and for those responsible to to be held responsible.

My goodness – if the Controller of Radio 2 resigns over the tasteless Brand / Ross prank phone call – then surely there will be people held accountable for the tragedy of Baby P?

Winning fairer funding for Haringey's schools

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Headed yesterday to the Youth Summit – except when I arrived they said it was the ‘Schools Forum’ not the ‘Youth Summit’. Assuming (wrongly) that my diary had simply got the wrong title – I found I had missed the pleniary session and so selected one of six workshops to sidle into and listen.

Sometimes you do have to think that fate steps in and plays her hand. I chose a session on school funding where a civil servant from the ministry was facilitating. Stephen Kingdom is, in fact, the Deputy Director in charge of School Funding and chairs the DSG (Direct School Grant) Review Group. This workshop was looking at possible changes to the DSG from 2011.

Of all the workshops in all the world – I had to walk into his. Play it again Stephen! What am I talking about? I am talking about my ‘fair funding’ for Haringey School campaign: our local schools are taken as inner London in respect of costs such as teachers’ wages – but then taken as ‘outer London’ in respect of Government funding. As outer schools get less funding than inner, it means we in Haringey get the worst of both worlds – higher costs, lower income. The funding gap works out at £1,000 per child per year – and it’s getting worse, as that’s up from £736 in the previous funding round.

It is completely and utterly unfair. So when I discovered this a while back I got a question at Prime Minister’s Questions where I was able to ask Gordon Brown directly about what he was going to do about this dreadful situation and he agreed it was an ‘anomaly’ and would be looked at.

Subsequently I had a meeting with Jim Knight – the school’s minister – who said that there was going to be a review. And – guess what – this workshop that I had ended up in was part of the consultation around the review!

I put my hand up nearly at the end to ask about this funding issue. Stephen said that it was my meeting/letter to Jim Knight that had raised the issue at a timely moment and therefore this particular issue was now included in the review. I pressed him again – but he said that he couldn’t say whether the differential issue would be resolved in the review or not.

Luckily I have another idea that will help him, Jim and the Government. This is so important to Haringey children – that I am now going to write to Jim to ask that a Haringey representative be appointed to the Review Board. That way at least we will know that the issue will be properly kept at the forefront of any changes to the DSG!

Then as I was leaving – I asked again about the Youth Summit and the reception lady said “oh yes, it’s in room G8”. So I found that after all!

Haringey Council and Icelandic bank account

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So – the world saviour is enjoying his moment in the sun. Lord knows it’s been a pretty frozen existence for the rest of Gordon Brown’s first year or so. However, the recriminations over the financial meltdowns have kicked off big time and it was him stirring the financial pot and writing the recipes over the last ten years.

Here in sunny Haringey we feel a cold wind blowing in from Iceland – and up until now have been relatively restrained in blaming Labour for what has happened with £37 million of local reserves caught in the Icelandic net of bankruptcy. However, at last night’s full council it was revealed that Haringey Council was moving money into Icleandic accounts as late as the 29th September – way way after the warnings were there. Why on earth were the Labour councillors in charge not screaming at the finance officers to move the money once the ratings had dropped?

Quite rightly, Robert Gorrie (leader of the Liberal Democrat opposition on Haringey Council) has called for an independent investigation.

This is what he said: “What is clear is that Haringey Council has been caught up in a financial storm that has uncovered real failings in the Council’s economic leadership. Haringey Council was typically slow to reassure residents and are still drip feeding the bare minimum of information out to the public. Repeated suggestions that losing £37 million will not impact future spending plans are simply ludicrous. This loss is almost 10 per cent of Haringey Council’s annual expenditure on services or more than 30 per cent of the Council’s own annual capital expenditure. Something will not get done as a result of this loss and the Council need to be honest with residents where and when that cut will fall.

“We must now have a full and independent investigation to get to the bottom of the decisions made to invest in these banks so the responsible parties can be properly held to account. Every pound needs to be accounted for and all residents’ worries need to be put to rest.”

Too bloody right!

Parliamentary season kicks off again

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Back to The Westminster Hour last night – and the gang is all there. They are kicking off for the new Parliamentary season with the three of us – me, Ed Vaizey and Emily Thornberry.

Before that it was a busy day campaigning for Nigel Scott in the Alexandra Ward by-election which takes place on Thursday (Yom Kippur). In fact, I have referred Haringey’s refusal to change to avoid the clash to the Equality and Human Rights Commission as religious Jews are actually forbidden to make a mark during their holy day. Of course – that doesn’t change the date but maybe it will help concentrate Haringey Council’s mind in the future – councils have a choice over which day to pick for by-elections, and that choice should be used with more care and thought.

Sarah Ludford (MEP) took a team in the morning delivering – in the pouring rain! Thanks Sarah.

Much of the political news is still dominated by Peter Mandelson’s return. The Conservatives’ line on it is that ‘Labour must be desperate’. Desperate they may be – but this was a political finesse I really didn’t think Gordon capable of. However – it now looks more and more as if Tony Blair ‘told’ him to go and help. Oh what an ironic twist that one old foe of Gordon’s told him to bring back another old foe to try to save his skin!

The return of Peter Mandelson

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Blimey – who ever would have thought that Gordon had the balls to bring back Peter Mandelson? In my view – a master stroke – unless M messes up again. Which is a gamble – though still as he said on the news clips – third time lucky. But in terms of keeping your enemies close and your friends even closer – bringing in Mandelson (who manages to be both enemy and friend) that close is to undermine the Blairite underminers of Gordon and bring in someone who is clever and regarded as experienced in trade and industry. Hmmmmmm – it will probably end in tears – but it is derring-do!

Labour supporters don't have to keep playing the "Waiting for Gordon" game

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I’ve got a piece in the latest New Statesman – really addressed at the question, ‘What’s an unhappy Labour supporter to do?’:

The behaviour of much of the Labour Party reminds me of the two main characters in Waiting for Godot. Dump Gordon or get behind Gordon? No matter how many times a deadline has been rolled out for Gordon Brown to turn things round, the malaise limps on. Just as in Samuel Beckett’s play, where Estragon and Vladimir keep on deciding to do nothing – because it’s safer or because something else may yet happen – so Labour carries on, neither happy with matters as they are nor acting to change them. There is, however, a simple way for Labour supporters to break out of this cycle. They should stop worrying about whether or not to change leader and instead think about changing party…

Compare Labour’s current political troubles with those of the Conservatives in the 1980s and 1990s. At that time, the dissidents – most notably Michael Heseltine, post-Westland – had an alternative set of policies. It was most certainly about personalities – but there was also no doubt that a Heseltine government would have had very different trade and industry policies from the Thatcher government. Again during the 1990s, there were real differences of policy at stake in the Conservative Party – and so genuine hope that a change of leader or change of political direction might bring substantive change.

The same cannot be said of the Labour Party in 2008. Take Charles Clarke’s intervention (NS, 8 September). What policy direction change does he really want, or what does his track record suggest? Perhaps a return to losing prisoners rather than losing data about prisoners, one might wickedly suggest. Is there a more substantive answer? I’ve listened to and read his words time and again, and beyond “I don’t like Gordon Brown” I can’t find one.

Labour’s supporters don’t have to play the “Waiting for Gordon” game any longer. The Liberal Democrats are ready and waiting to welcome them.

You can read the full piece here.