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Perhaps the most irritating aspect of some of the media coverage of the current financial crisis is the “lionisation” of Gordon Brown who seems, foolishly I suspect, to be enjoying it all. The reality is that he is through his lack of diligence whilst in Office plus one suspects to a large degree, the intellectual inability to discharge his duties, he is personally responsible for the mess and lack of preparedness in the UK Economy.

I can claim no ‘glory’ for the following culled from Hansard and put under a ‘non du plume’ on the internet by someone else, but it does rather damningly make the point that this all happened on the “One Eyed One’s Watch”.

20th May 1997.

As Chancellor of the Exchequer, Brown makes the following statement to the House of Commons concerning the Bank of England:

“It has long been apparent that the regulatory structure introduced by the Financial Services Act 1986 (FSA) is not delivering the standard of supervision and investor protection that the industry and the public have a right to expect. The current two tier system splits responsibility between the Securities and Investments Board (SIB) and the Self Regulatory Organisations(SROs), together with the Recognised Professional Bodies This division is inefficient, confusing for investors and lacks accountability and a clear allocation of responsibilities. Reform is long overdue to simplify the delivery of financial service regulation, and this was a key commitment in our Business Manifesto. At the same time, it is important to preserve the beneficial aspects of the current Act, including practitioner involvement and differential levels of regulation for wholesale and retail business.

I can announce today that work is to start immediately on the legislation needed to simplify and reform the regulatory system at an early opportunity. I am announcing our intentions in advance to give the SIB and the self-regulating bodies the opportunity to work on the detailed implementation of our proposals, to ensure the smoothest possible transition to the new regime. I am confident that the simpler system we are proposing will reduce compliance costs, and increase public confidence in the regulatory regime…..

….These reforms are founded on sound economic principles. This is a long-term policy for long-term prosperity. It provides the building blocks for a new economic strategy for monetary and financial stability aimed at enhancing longer term growth and prosperity. I am confident that their success will be reflected in a stronger and more robust economy for the long term.”

 11th November  1997

During the debate in the Commons on the Banking Bill, the then Shadow Chancellor Peter Lilley made the following points:

“The Bill will hive off debt management to a new quango under the Treasury. We know that funding policy is an intrinsic part of monetary policy, and the Bill will leave the Bank as a one-club golfer without even a putter left in the bag. How will the Treasury, the Bank and the new board co-operate to handle monetary policy? If they need to get together, why is it necessary to separate them in the first place?

With the removal of banking control to the Financial Services Authority–the “super-SIB”–it is difficult to see how and whether the Bank remains, as it surely must, responsible for ensuring the liquidity of the banking system and preventing systemic collapse.

What happens if the needs of the banking system conflict with those of the inflationary target? That has happened in the past in the United States, and it could conceivably be happening in Japan. I understand that there is a suggestion that a committee is to be established to work between the Bank, the FSA and the Treasury to try to cope with that sort of problem. If that is necessary, why is it necessary to hive off powers in the first place? ”

In the event, no Committee that connected the FSA, BoE and Government was ever formed as subsequent events have clearly demonstrated.

Conclusion:

Gordon Brown may prance and preen himself as much as he likes and enjoy what I have previously referred to as his “Icarus Moment” but, he cannot stand on his record because clearly he was as poor a Chancellor as he has proved to be a Prime Minister. If things come ‘reasonably’ right in terms of there not being a sharp increase in unemployment, bankruptcies, repossessions and inflation, I think the public will acknowledge that.

Over the next month or so, I would expect the Tory lead in the Opinion Polls to be cut substantially, for example but ultimately, it won’t help either Brown or the Labour Party, they will lose the next Election. For the majority of people this will be less to do with wanting the Tories specifically, it will have a lot to do with wanting change, Labour is totally jaded and jinxed now but also, it has to do with Labour “breaking faith” with the electorate and not delivering on their promises.