Tuesday 11 January 2011

Do Cameron and Osborne BOTH wish they were bankers?

I am shocked, shocked to find that George Osborne has been on the side of the bankers all along. (Though I suspect he might, like Captain Renault in Casablanca, collect a small donation or two on his way out). Today's Guardian has an account of how it was game, set and match in the City as Downing Street admitted it had backed down, detailing how Osborne was the bankers' ally against Vince Cable and Lord Oakeshott, despite having out-bid them on banker bashing rhetoric in opposition.

Could it because David Cameron and George Osborne both wish they were bankers?

The Mirror's Kevin Maguire says he has on impeccable authority a private comment from Osborne - ""At times like that I think how much easier it would be to run a hedge fund". (In fairness, that amusing aside over an Andy Coulson sting on the Shadow Chancellor was before the crash, when being a Master of the Universe would have attracted less opprobium).

Which reminded me of how David Cameron has talked somewhat more publicly about how he could well have been an heriditary banker.

Indeed The Times reported that Barclays' Bob Diamond was among those who purred their approval" at the Tory leader's declaration to a conference of top bankers of his love for banking, Nigel Lawson and flatter taxes. (And this was a year after the crash, with Cameron offering to be a foulweather friend in what the newspaper described as a difficult "balancing act" of "wooing the world’s most powerful bankers while assuring Middle England that he would not give that most hated profession too easy a time").

Did he get the balance about right?

Speaking to a gathering of top financiers, the Conservative leader told them: “My father was a stockbroker, my grandfather was a stockbroker, my great-grandfather was a stockbroker.” The City, he assured them, was in his blood. Those present, who included Bob Diamond, president of Barclays, and Richard Gnodde, the co-chief executive of Goldman Sachs in London, purred their approval.

Diamond - whose "bankers should stop apologising" performance today suggested he may just be an undercover sleeper agent for his local Constituency Labour Party - told the Commons Treasury Committee today that neither Cameron nor Osborne had asked him to restrain bonuses.

Well, we hoped for better, but it turned out like always, to adapt the pithy pessimism of a former Russian PM.

Still, two mysteries remain to be explained in this sorry tale. Why on earth did Osborne bark so loud if he had no intention of biting? And why, having decided not to bite, is Nick Clegg still barking away?

It would have been a surprise to many people if Osborne had not just barked, but had bitten too. It is difficult to think he ever had any intention of doing so. So wasn't it surely an unforced error to vocally lay charges of hypocrisy against politicians who talk tough and fail to deliver?

When it comes to the Government and the banks, surely the public are entitled to ask why the Government talk tough and make promises, but then fail to deliver. As we wait to see bonus payments over the coming months, we will remember the Prime Minister's promise that the era of the big bonus is over.

But George Osborne isn't a Liberal Democrat. He expected to be the Chancellor within six months of saying that. (Osbone didn't think the Tories would win a majority either, being one of the very few not to overestimate Cameron, but not even George would have been laying a nefarious trap in case he lost the post of Chancellor to Ken Clarke or Vince Cable).

This makes Osborne look like either a clown or, more likely, a cynic. It corrodes political trust generally. More specifically, it risks reinforcing an impression that all of the government's "progressive" rhetoric is just a front for the Same Old Tories.

So why say it?

So the answer is probably short-termism. The Tories were very rattled by focus group findings where the public were very suspicious of them - on the grounds that the bankers were almost all Tories, and that Osborne and Cameron looked like the sort of people who might understand the bankers rather better than the voters.

I can't imagine where anybody got that idea.

But it was a core reason that they didn't win a majority - as Philip Cowley and Dennis Kavanagh report in their 2010 election study:

The most worrying finding for the Conservatives was the perception that they would, in a crunch, stick up for rich and privileged people. Cameron privately confessed late in 2008 that the persistence of this last image kept him awake at night.

If it was that perception that did as much as anything to deny the Tories victory, one can only assume they have a secret but cunning re-election plan where that simply won't matter.


The second mystery is why the LibDems in the Coalition are stepping up the anti-banker rhetoric, even as the Coalition government backs down on the substance. Nick Clegg popped up on the Today programme yesterday to make similar-sounding points about bonuses at banks which got government support to those made by Ed Miliband, as Leader of the Opposition, later that morning. (Though Miliband and Johnson had a proposal: to keep the bank bonus tax for another year).

So why keep barking when you have decided that you can't bite?

This is simpler. Nick Clegg has lost the argument he was making last Autumn in the party about owning the whole Coalition agenda, and not trying to grasp at "synthetic differences" to differentiate the yellows from the blues within it.

He still looks like Nick Clegg - but he's going to have to try to sound like Vince Cable, as Gary Gibbon notes.

Indeed, only Laws and Clegg seemed to publicly disagree with just about everybody else in the party about that strategic argument: 'distinctiveness now; not just distinctiveness in 2015'.

One approach would be to win some important policy battles, while making compromises (and accepting Tory leadership over the deficit and spending cuts). But they are the less powerful party in government - and the complexity of governing might not make the compromises distinctive enough.

So watch out for another option - which is to loudly proclaim support for policies that the LibDems know will not be taken forward.

Simon Hughes did so on proposing a 7% quote for private schools at universities. I fear Dave and Nick might be less keen than this left-wing blog on even thinking about it.

But Cabinet ministers can join in too. So we may increasingly see LibDem frontbench ministers advocating policies which are not those of the government - in public, and not just to undercover reporters - while admitting they have not been able to carry the day with their partners.

Rachel Sylvester's very interesting Times column this morning (£) on this theme - indeed the hankering for a return to "equidistance" while in Coalition - cites one LibDem minister who has worked out how the game is played:

For the Lib Dems, it is becoming increasingly clear that the perceived lack of independence is turning into a disaster. And slowly but surely, Mr Clegg is shifting strategy.

To begin with, the Deputy Prime Minister emphasised that his party would “own” everything that the coalition did ...

Now a subtle but important change is under way. Senior Liberal Democrats have started to emphasise with more and more vigour their areas of disagreement with Conservative colleagues. On bank bonuses, control orders, electoral reform and the House of Lords, Mr Clegg has begun to emphasise his own distinct agenda. One Lib Dem Cabinet minister says: “I call for Trident to be scrapped every time I get the chance.”

They have made the transition from a party of opposition to a party of government - and its been pretty tough.

Perhaps the new plan is to fuse the two states at once, so as to quickly make the journey halfway back.

1 comment:

T.N.T. said...

I don't see how the Lib Dems' change of tack is going to help them. Last year, throwing their weight behind hard-right Tory policies made them look like spineless collaborators, or heartless bastards. This year's approach seems to be to say, "oh yes, the policies are really awful, but we did tell the Tories how bad they were" just makes them sound like some ineffectual agitprop outfit.

Your reference to Bob Diamond as a possible undercover Labour agent made me laugh out loud for about 7 minutes. Maybe he'd be a good replacement for AJ as Shadow Chancellor.