Wednesday, February 09, 2011

Matthew Oakeshott is right, Nick Clegg is wrong

Matthew Oakeshott has stood down this evening as a Liberal Democrat Treasury spokesman in the House of Lords. This follows his robust comments on George Osborne's deal on lending and bonuses with the banks.

The Daily Mail quotes Matthew as saying:
'If this is robust action on bank bonuses, my name's Bob Diamond and I'm going to claim my £9 million bonus next week."
"I think what the country will be asking, and Liberal Democrats will be asking is 'will Bob Diamond get a bonus of £9m next week, yes or no, is it acceptable for Government, yes or no?' and particularly, on these state banks we bailed out."
"You keep fighting. Coalition is new, we've done the best we can to get the best deal we can. I don't think it's a good deal."
The BBC report says that Matthew left "by mutual consent", but it is hard to see why he would have gone voluntarily. The timing of this decision (6.45 p.m. this evening) gives rise to suspicion that it was designed, at least in part, to save Danny Alexander embarrassment when he appeared on Channel 4 News.

That report also quotes a party spokesman as saying:
Both Lord Oakeshott and the party leadership agreed he could not speak for the party when he did not support the party's policy.
But that is nonsense. How can the finer details of a deal thrashed out between a Conservative chancellor and the banks be Liberal Democrat policy?

I accept the case for collective responsibility, but Matthew Oakeshott is not a minister. Indeed, one of the weaknesses of the coalition agreement was that the Liberal Democrats were given so few front-bench positions in the upper house.

And what Matthew said is simply true. The country and Liberal Democrats will be asking why the head of a bank that had to be bailed out by the taxpayer is receiving a £9m bonus.

I am dismayed at the lack of political judgement here. Liberal Democrat members, by endorsing and then continuing to live with the coalition deal, have shown Nick Clegg great loyalty. We must be allowed to let off steam sometimes and to have figures like Matthew Oakeshott who are licensed to do it for us. (Another worrying factor here is that Matthew is widely seen as being Vince Cable's representative on Earth.)

And does Nick really think that the Liberal Democrats' core vote at the next election will be people who think we should not be too hard on the bankers?

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Unknown said...

This is proper Liberal banking policy talk. We want to make banks better by stopping some of the appalling practices that drain our long term investments (i.e. our future) into short term gains for personal profit.

The position of those who simply advocate that the state should start drawing more and more taxes on the profits of banks will not achieve this. It seems to me that it will simply turn us into the biggest bonus seeker of them all. We cannot simply say 'bankers have been getting rich on profiteering and since we can't beat them at it we should join them' we should be saying 'how the belly hell can we beat those bankers at it?'

Lord Oakshot is of course one of those increasingly rare people, a man who knows what he is talking about. He isn't a socialist, or a policy wonk or a PR man. He has a long and distinguished career in finance, and if he thinks we can do better, then I rather suspect we can.

Three cheers for Oaky and poo to the fat cats.

etc etc etc


Unknown said...

I hadn't heard about this till I read your post & I have to say I agree. There is no reason to be so control freaky over someone not even in the Government. Someone needs to pull Nick out of the rabbit hole fast if he's confusing Osborne's deal with our policy.

Martin Veart said...

We are a separate party but it seems we don't have a separate voice?
There is a limit. I'm a nobody in this party but even I am starting to wonder how far the silence will be enforced downwards.

This 'resignation' is deeply disturbing.

Anonymous said...

No he isnt. He's a fool. And thats not to say im not disheartened by the lack of change regarding banking.

Cable wanted to reform the banks (good) and seperate investment and retail arms. Oakeshott wants them to go back to the days of irresponsible lending (bad) and pursue inflationary policies that will impoverish millions.

There is a difference.

John Minard said...

I agree with Caron!

Pete said...

Anonymous says:
"Oakeshott wants them to go back to the days of irresponsible lending (bad) and pursue inflationary policies that will impoverish millions."
If Anonymous is reading this - can I ask for her source please?

Anonymous said...

Just on a point of fact, of course Bob Diamond isn't "the head of a bank that had to be bailed out by the taxpayer," because Barclays wasn't bailed out.

iain said...

the one hopeful thing is that now we have a heavy weight Liberal econ spokesperson who can start saying what we would do. I would like to hear more about re-mutualising Northern Rock and creating some other strong regional (mutual) banks,big expansion of employee ownership etc etc

Frank Little said...

Barclays was admittedly bailed out (and baled out) by oil sheikhs, so it and HSBC remain independent. But all four clearing banks benefited from "monetary easing" and other assistance from the Bank of England.

One trusts that Diamond's bonus is all in the form of "contingent" paper.

Anonymous said...

I agree that Matthew shouldn't have to resign because, as you say, he is not a Minister and therefore isn't bound by collective responsibility.

However he does seem to have got mixed up between Bob Diamond, whose bank was not bailed out by the taxpayer, with those who were.

It is far more concerning that the deal the Labour Government struck with Lloyds and RBS was so feeble that the Government doesn't appear to be able to restrict bonuses in the state owned banks.

Of course it is actually better from the point of view of maximising tax receipts that large bonuses are paid (of which 50% will be paid in tax) than retained by companies to add to their profits )of which only 28% is paid in tax).

TheFuzz said...

Apart from the factual inaccuracy over Barclays that's already been pointed out, and the issue that Oakeshott's alternative would've been even more reckless, you should consider the fact that this post has given ammunition to the socialist far left of the Lib Dems, like the rabid Linda Jack, who's slurped up your post as evidence she was right all along and that Nick should commit harikiri, etc etc.

Jonathan Calder said...

If I were looking for advice on blogging, I am not sure I would approach someone who thinks it a cool idea to call themselves "TheFuzz".

Liz said...

I can't imagine I'm the only person who's watched George Osbourne delivering his Mansion House speech this week, claiming bank reform for the Tories, and in so doing undermining all the work Vince Cable did to gain us massive credibility in this area. I'm all for the coalition going the distance and appreciate the difficulty of Cable commenting as many of us used to love him doing. I'm therefore newly lamenting the departure of Matthew Oakeshott as Treasury Spokesman in the Lords where he was doing a great job of keeping the flame alive.

Our approach to Banks and associated issues should not only be but also should be seen and heard to be a big point of differentiation between us and the Tories. Matthew Oakeshott is right, Nick Clegg isn't.