Views
Shaking up banks is essential to avoid more disasters - for the Inverness Courier
THE government's total failure to do anything to change the way banks in Britain work after the recession was laid bare last week by two events: President Obama's reform plan and the takeover of Cadbury by Kraft.
The US President has done two things that I and others have been urging Gordon Brown to do: properly taxing the banking system and proposing radical reform to break up the banks that are "too big to fail".
Even after the US has acted, it is simply astonishing that the UK government continues to fail to act against the bankers who are now profiting grotesquely from the support that the taxpayer gave them.
We simply cannot afford to go back to business as usual. If that happens, as the governor of the Bank of England has said, then the conditions that caused the awful recession that we are living through will re-emerge, and it will happen all over again. Surely that should be incentive enough not to be content with business as usual.
Breaking up the banks is essential to delivering change. One of the major causes of the problems we are facing is that many banks ordinary retail activities - lending on the high street and to business - became polluted and then overwhelmed by the casino style bets those same banks placed on the international markets. We then had to bail out these banks failed global operations - not just their work in this country.
A clear separation of the sort Vince Cable has called for would mean that high street banks would be tightly regulated and their health guaranteed if things go wrong. Global casino investment banks would be told that if things go wrong they would be allowed to fail.
Of course, this is a long process. So in the meantime all banks should pay extra tax in recognition of the huge support that the taxpayer has given them. Liberal Democrats have proposed that there should be an extra levy on banks profits, raising billions that would help to plug the gap in the nation's finances and so protect some vital public services from cuts.
Over the last three or four decades, Labour and Conservative governments have been obsessed with the one square mile of the city of London and forgotten about the remaining 100,000 square miles or so of the rest of the country. If we are to rebuild growth that lasts in Britain, then we have to put the City in its proper place and lavish some of that attention on the rest of the economy instead.
IRAQ INQUIRY
Two weeks ago, Nick Clegg quite rightly pressed the prime minister on the decision that he should not give evidence to the Iraq inquiry until after the general election. Mr Brown's answer at prime minister's questions was simply that when he gave evidence was a matter for Sir John Chilcot, who is running the inquiry, and not for him.
As Nick said at the time, this is not just a matter for Sir John it is a matter for the Prime Minister's conscience. It seems that Mr Brown in the end changed his mind, because it was announced on Friday that he would, after all, give evidence before the election.
This is the right decision. The decision to go to war in Iraq alongside George W. Bush was one of the greatest foreign policy mistakes that this country has made in modern times. It put us on the wrong side of international law, at odds with most of our European allies, and involved us in an unnecessary and illegal conflict for which we are still feeling repercussions today.
The decision had a direct effect on the level of support, resource, and equipment for our troops in Afghanistan, causing huge damage to our mission there.
This election is likely to be people's last chance to pass judgement on this failed Labour government. It is right that all the evidence on this disastrous decision is before us when we have to decide how to vote.
Posted on: 26/01/2010
