Comment: Tories speechless in financial crisis
George Osborn: speechless?
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Gordon Brown is intervening to stabilise HBOS, it has been revealed.
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Friday, 19, Sep 2008 05:24
Has anyone heard anything from the Tories recently? It's a strange, almost dreamlike feeling, not having a Conservative spokesman waxing lyrical on every issues of the day. Suddenly, they are nowhere.
There's a good chance the Tories are feeling something they haven't felt for a while – concern. Gordon Brown pulled a clever little trick this week by facilitating the Lloyds TSB – HBOS merger, starting work on it – apparently - as early as Monday, when he bumped into Lloyds chairman Sir Victor Blank at a City reception.
There's little wonder Labour spokespeople have been hawking the line about 'tough economic times' and 'the right man for the job' incessantly since Lehman Brothers collapsed early Monday morning. He gives every indication of being rather good at all this. If things go as planned, his initiative may have just saved us from a massive cash-sucking bank – far larger than Northern Rock – falling into our very public, taxpayer laps. About time too. Taxpayers never seem to be the ones to profit from these firms, but we're always the ones picking up the bill when things go wrong.
There are risks to Mr Brown's actions, of course, and this brave little moves could still cost him. There's a potential electoral glitch in being personally active in a decision that could put thousands of voters on the dole, and there's still the chance HBOS could drag Lloyds down into the mud.
And then there are the other questions. Mr Brown's newfound distaste for City greed and lack of financial regulation seems odd, given he never mentioned this before in his lavish praise for the UK's economic powerhouse in east London. On a larger scale, it was Labour which encouraged a view of equality which valued absolute income far higher than relative income – meaning there was no moral obstacle to obscenely disproportionate levels of wealth living side by side.
Not only that, but new research by the Taxpayers' Alliance, released today, put his decade long record in the Treasury under the spotlight. It says the tax burden went up significantly under his tenure, while Britain's economic growth was far slower than that of other English-speaking countries.
It's always possible we're witnessing not so much an example of Mr Brown's economic competence, but something we'd forgotten about – that Brown does best during a crisis. That was what gave him such a boost on entering Downing Street, with foot and mouth outbreaks and terrorist attacks popping up left, right and centre, and it seems to be helping him out here too. That dour persona – so disastrous in normal political life in 21st-century Britain - comes into its own when the smile has been wiped off everyone else's face.
The alternative voice available to the British electorate is that of Vince Cable, the Liberal Democrat economic spokesman Nick Clegg referred to – rather toe curlingly – as "a twinkle-toed economic prophet". Mr Cable is overrated. If he is as good as the Liberals say he is, they would have presented the public with a fully-costed tax cutting plan, rather than assurances and innuendo.
Be that as it may, he is good. He predicted Northern Rock's nationalisation and, to a more limited extent, the housing crash. Not only that, but he can explain economics – which very few politicians, journalists, or party members genuinely understand – in fairly comprehendible language.
And so the Tories find themselves squeezed out the picture. With Brown failing to act uselessly, and Liberal Democrats at the ready with their financial attack dog, the Conservative response seems to have been to shut up shop. They've spent well over a year now endlessly droning on about how Mr Brown didn't fix the roof while the sun was shining, but now they must gaze at that phrase with some trepidation.
They never complained about the spending of government as it happened, making this retrospective indignation somewhat distasteful and opportunist. But far more important, they know that opening up a 'roof-sunshine' salvo now will look pernickety and useless. The last thing they need is to be whingeing about the past while the government seems to get its hands dirty trying to fix the situation. That plays all too easily into Labour's 'all style, no substance' attack.
The current crisis also shines a spotlight on George Osborne, the shadow chancellor. I find the possibility of him sitting in the Treasury, like a child with a grand new toy, almost as obscure and pathetic as giving the keys to the Foreign Office to David Miliband. The child chancellor following the child foreign secretary into office. Now that events have centred on his brief, he says nothing of any value whatsoever.
Here's his statement in response to the Lloyds TSB-HBOS merger:
"The situation in the financial markets is very serious. We support the merger of Lloyds TSB and HBOS, and think it is right to suspend competition questions in the public interest. We will support measures that will stabilise the banking system."
So far he has simply repeated the government line.
"On the question of short selling, market abuse is not acceptable, but we must tackle the causes of this crisis, not the symptoms."
Again – the government line.
"The causes are a decade of debt when the government hubristically claimed that we had abolished boom and bust."
This is the roof-sunshine argument, smuggled pointlessly into the middle of the statement.
"In relation to the suspension of competition rules, the test must be what's in the public interest. In normal times, there might be concern about having such large high street bank. However at the moment it is in the national interest temporarily to suspend competition arrangements, as the priority is to bring stability back to the British banking system."
Again, this is just the government line.
It's an easy comparison with David Cameron, whose comment after the banning of short-selling was: "Anything the prime minister and the government do to help will have my full support." Very useful.
Having set themselves so firmly in the background, one wonders how the fate of the Tories will be affected if the crisis continues – right now FTSE seems to be recovering somewhat, but few would be confident enough to maintain much optimism. There's little chance of this period lasting so long it threatens a Conservative win at the next general election. Gordon Brown's weak grasp of necessary prime ministerial qualities and Labour's stale performance almost guarantee that.
But it's worth remembering that electorates, especially the British electorate, vote on the money in their pocket. If the current tepid Conservative performance on the economy continues, and the economic crisis persists, the election could prove a closer call than many of us predicted.
More worrying is this: what exactly will the Tories be doing if this happens when they are in power, and how precisely will they stop it happening again?
Ian Dunt