The riots and the return to the big picture

Last week’s riots were shocking. The effect upon the many communities, families and individuals affected was undoubtedly profound. They have prompted plenty of soul searching and a wide range of diagnoses. If we are optimistic we should hope that they act as a catalyst for addressing problems of urban Britain that have been developing over many years.

The riots have not shown the political classes in a great light. There was the slow response from the Government – was this really a situation sufficiently serious to justify curtailing our vacations? There was the muddle over who has shaped policing strategy, leading to a potentially damaging war of words between the Government and senior police officers. And there is the extraordinary range of illiberal and disproportionate measures that David Cameron has seen fit to propose in response to the crisis. He seemed intent on manufacturing a full blown moral panic in order to take a worryingly authoritarian turn. Liberal Democrat MPs are clearly very uneasy at the way in which Mr Cameron has changed his tune from those far off days of compassionate Conservatism.

The riots have pushed just about everything else to the back of the news agenda for the last week. That is deeply unfortunate for at least two  reasons associated with this period of momentous – indeed unprecedented – economic turmoil. Read more of this post

Self-restraint can’t be the cure for the persistent merchant banker

Mixed news from the world of financial regulation today. My morning toast was made that bit more enjoyable by encountering the news that Vince Cable is having no nonsense from the FSA about its report into the collapse of the Royal Bank of Scotland (reported here). The FSA was thinking that maybe it wouldn’t share the outcome of its investigation into the events leading up to the £45bn bailout, ostensibly because it might influence George Osborne’s deliberations on the merits of reforming the Financial Services and Markets Act.

After all, if you are considering whether the system needs to change in order to avoid a global financial crisis, the last thing you’d want to know was where the failings of the existing system are.

In contrast, Vince is arguing that he needs to know what’s in the report because ‘lessons must be learned’. All you can say to that is, nice one Vince. That’s absolutely what we need by way of meaningful Lib Dem input into government – transparency and a willingness to stand up to entrenched interests.

Later in the day we had a rather pallid Gordon Brown popping up in the television studios to plug his book, and in the process do a mea culpa for the weaknesses of the system of global financial regulation. And that follows comments made earlier this year by George Osborne, who identified the banks’ failure as imposing massive costs on everyone. So perhaps we’re heading for political consensus that if significant reform is necessary we need to see it happen. Read more of this post