Forum for National Recovery: Fundamental change is moving on to the agenda

IN THE afternoon, the debate shifted from the immmediate problems of economic recovery to the structural weaknesses in the way Britain reaches economic and financial policy decisions. Two themes dominated the sessions: the role of commercial financial institutions, the banks and the building societies; and the role of non-commercial financial institutions, the Bank of England and the Treasury.

It was clear that the general perception of building societies is more favourable than that of banks. The fact that there is a problem in housing finance was generally attributed to public policy - the long-term effects of mortgage tax relief, the decline of the private rented sector and the boom-bust cycles in the economy - rather than the commercial institutions, such as the building societies, which lent the money.

In the case of the banks, however, there was more a perception of institutional weakness, in particular that banks were not close enough to their customers. There is a commercial message here which the banks are well aware of, but to judge by the debate, they need to concern themselves more vigorously.

But the need for reform was even more evident in the session on the public institutions. There was a fair divide over the suggestion that the Bank of England should be made more independent of the Treasury: the Bundesbank is not seen by all as the ideal model. But if the Bank is to become more independent, there was widespread acceptance that it should be reformed in such a way as to make it accountable for its policies. People who distrust giving more power to the Bank would be much more comfortable if it were changed in such a way as to make it more responsive.

As for the Treasury, clearly the meeting felt that it had to change. The mood was best summed up by the view that the Treasury was trying to do too much, and as a result not doing anything very well.

The Independent's suggestion that the Treasury should be split into an Office of the Budget which dealt with fiscal matters, and a Department of the Economy which co-ordinated economic policy and helped offset a bias against industry, was echoed by many speakers from different backgrounds.

It seems that the need for structural change in the way Britain is governed is starting to become a live issue in a way that would have been unthinkable a few months ago. For example, Howard Davies, the director-general of the CBI, was able to predict that the Bank of England would become independent in the next few years. If Britain was part of a European currency system, it would need an independent central bank as other EC banks became more independent; if Britain remained outside, it would need an independent bank for international credibility. Equally, reform of the Treasury has now been put clearly on the national agenda in a way that would have been almost unthinkable three or four years ago.

Structural change is not a party political issue. Indeed, the partisan nature of politics is part of the problem. If there was a clear message for politicians from the afternoon's discussion, it was that they are arguing about the wrong things. They should be less concerned with the sort of issues that dominate Westminster debates and more interested in the much bigger issue of the reorganisation of Whitehall.

(Photograph omitted)

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Sport
Louis van Gaal
football
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
Arts and Entertainment
Jay Z has placed a bet on streaming being the future for music and videos
music
Arts and Entertainment
Festival-goers soak up the atmosphere at Glastonbury
music
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Project Implementation Executive

£18000 - £23000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Chiropractic Assistant

£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...

Recruitment Genius: Digital Account Executive - Midlands

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Web Developer

£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own