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."

And:

"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."

And:

"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?