Friday, 21 September 2007

The blame game and Gordon Brown's "big tent"

Much to my surprise the government and it's BBC lackeys have been queuing up to blame Mervyn King for the Northern Rock debacle. If you listen to the "narrative" coming out of the Labour hierarchy and their BBC lickspittles such as Robert Peston, the only place than blame can be laid is at the door of Mervyn King. I am confused, why does no blame accrues to the board of Northern Rock for following a flawed business model? The answer is clear, the Northern Rock management should have been examining the risks inherent in their business model and who was Chairman of their Risk Management Committee? Sir Derek Wanless, to whom no blame can be attributed as he is one of the untouchables, being one of Gordon Brown's trusted great and the good. You will not be surprised to learn that the links between Northern Rock and this Labour Government go deeper than just Sir Derek Wanless. As an example, Deborah Mattinson, Gordon Brown's personal pollster, advises Northern Rock on its corporate responsibility programmes. We can only speculate as to whether this role included advising that Northern Rock give around £500,000 to Labour's IPPR "think tank".

Another oddity in this affair were the comments of Andy Burnham, the Chief Secretary to the Treasury. When he was asked on Monday whether the government would "guarantee 100% of all bank deposits", he replied that it would be "the wrong thing" for politicians to get involved "in that way". An unusually straight answer for a Labour Minister, he must have been very sure of the answer indeed. Unfortunately, within an hour his boss Alistair Darling had done exactly what Andy Burnham had said would be "the wrong thing" and had issued the 100% guarantee.

I am not convinced by Mervyn King's evidence to the Treasury Select Committee yesterday, there seems to be too much evidence pointing to the involvement of Number 11 and hence Number 10 in the decision to support Northern Rock. One of Mervyn King's comments regarding the guarantee was interesting "my far as I know" was odd from the man who was supposed to have been in charge and to have made the decision. He was also careful to say that the decision was a tripartite one involving the Treasury, the FSA and the Bank of England. He also appeared to be careful not to be 100% clear over whose idea the 100% guarantee had been. I suppose if we are lucky we may find out the truth in 20 years time. In the meantime, this Labour Government will sail serenely on protected by the BBC and tame journalists from any hard questioning. Gordon's "big tent" will expand as we slip towards one party rule.

I have just taken a look at the BBC UK news home page and the Northern Rock affair has disappeared completely. I moved onto the BBC UK business page and there we have "The City watchdog, the Financial Services Authority, is next to be quizzed by MPs on Northern Rock's problems" and more on Mervyn King - "Has Mervyn King" done enough?". The giving of "independence" to the Bank of England in 1997 was a masterstroke, suddenly the Treasury and the Government have no responsibility for anything going wrong with the banking sector of the economy.

Of course one source of criticism of the Government has been noticeably silent, the Conservative Party. George Osborne should be doing a tour of the media attacking Gordon Brown's economic record not sitting quietly admiring his tasteful wallpaper. I would like to see John Redwood being used to attack the Government's economic policy, he actually understamnds what has been happening and can articulate it. Unfortunately the BBC have destroyed his credibility by showing "that video" so many times. Take a look at John Redwood's web site there are many excellent articles on the Northern Rock crisis which are extremely well and intelligently written, I wish I could write as well as he does.

1 comment:

Anonymous said...

Agreed that we would have been better off without the Northern Rock .. er ... crumbling, but - a Labourite conspiracy? A bit paranoid, surely?

And as to Mervin King, what about this?