City minister Greg Clark is a courteous man, always up for subtly flattering a colleague. Today, however, paying homage to the body which had recommended the new regime for banks, he laid it on with an industrial-sized shovel.
As he suggested that the Parliamentary Commission on Banking Standards comprised some of the world’s “most formidable intellects”, the faintest of self deprecating smiles flickered across the face of its Tory chairman Andrew Tyrie. It was like the smile you could imagine Sherlock Holmes permitting himself after an amazed Inspector Lestrade had yet again heaped thanks on him for solving an especially intractable case.
One reason for this lavish praise may have been that the Government was not carrying out quite all of its recommendations, such as reserve powers to split the investment and retail arms of the entire industry if it continued to take reckless risks with customers’ money. This point was made repeatedly by Labour MPs. Which was just as well, since Clark was armed with a different answer for each one.
To his Shadow Chris Leslie he explained that “it would seem odd to foist on the Governor of the Bank of England a power that he does not want to have.” To Labour’s Pat McFadden – whom Clark swiftly commended for serving on the Commission “with distinction” – he politely explained “that to have a reserve power in a Bill to change the whole system is in effect a different policy.” And to Labour’s Greg McClymont, that it was better to leave it up to the regulator to split a misbehaving bank.
It was indeed this key power which meant the “ring fence” between the two arms would be “electrified”, as the Commission had successfully urged a reluctant Government it should be. During an orgy of mixed metaphors, the MP Mark Garnier argued that the point of “electrifiying” the fence was to prevent recalcitrant bankers from “burrowing under it.” Er...go figure.
According to Clark, the reform was as much about protecting the reputation of those in honest banking as tackling the “very small number” who “besmirched” the industry’s reputations. The purpose was “to allow them to go to the pub without being teased and ribbed about working in a bank”.
This seems improbable. No one compares their innocent Co-Op or even HSBC cashier with predatory fat cats like Sir Fred Goodwin or Bob Diamond.
Clark had a better point, in response to Leslie’s charge that Osborne had been “dragged kicking and screaming” towards reform; it was Labour’s “botched regulatory system” which had helped to trigger the crisis in the first place. Except, of course, at the time, there was not a peep of complaint from the Tory front bench. But that’s politics.