WRONG APPROACH, WRONG TIME
Who would have thought that the Liberal Democrats would be worth
more than Lehman Brothers, that banks could be taken into effective public
ownership to a chorus of approval from the Conservative Party, or that Gordon
Brown, a month after being widely considered politically dead, would find
himself acclaimed the saviour of the world’s financial system?
A week is truly a long time in politics and, as of mid-October, the financial
turmoil has revived Labour, damaged the Tories and left the Lib Dems undisturbed
on an unimpressive poll rating.
That might seem unfair given that the party’s shadow chancellor Vince Cable was
the only politician of any note to warn that debt levels had reached
unsustainable levels. Politics, though, rarely gives rewards for being proved
right after the event; it gives rewards for implementing, or at least offering,
It is true that the party got out a rapid economic recovery plan of measures to
tackle the worst short-term problems, but it has so far failed to convince the
public that its ability to spot the danger has led to any insights into how to
prevent it happening again.
One hears a good deal less nowadays about the Lib Dems pioneering the idea of an
independent Bank of England, an institution that hardly distinguished itself by
keeping lending rates high as the credit system came crashing down around it.
With that economic flagship listing badly, does the party have anything with
which to replace it?
Not really, and it is easy to see why. As the banking crisis has exposed the
limits of the markets, and the need for government intervention to rescue them
from their own folly, so a climate of opinion has been created quite at odds
with the Lib Dem direction of travel.
For the past few years, the party has belatedly embraced the 1980s baggage of
faith in markets, ‘light touch’ (for which read ‘ineffective’) regulation of
them, lower public spending and an uncritical view of the private sector. Those
who espoused these views – and even more so the fringe of libertarians who have
lately attached themselves to the party – have been left looking both foolish
It is governments to which people look for protection when things get bad
because only governments can act on the scale required.
There has been a three-party consensus on the role and regulation of business
for the past decade, which has allowed the practices to develop that have led to
the present fiasco. The Conservatives genuinely believed in a ‘light touch’ and
in leaving the private sector to its own devices, Labour was told to believe in
it and the Lib Dems went along with this because everyone else did.
If ever a situation cried out for the party to say, “we knew it would all end in
tears, and this is how to prevent it happening again”, it is now.
Can the party do a handbrake turn away from an approach rendered redundant by
events and call instead for tight regulation of banks and for a mindset that
looks sceptically at the claims of the spivs and chancers who have successfully
bullied politicians into seeing thing their way for too long?
There may not be too long in which to do this. The Conservatives will eventually
revert to type and to a Thatcherite approach to markets and regulation, while
Labour may decide it is onto something at present and issue plans for effective
regulation to a receptive public.
Remember what happened to the Lib Dems last time there was a general election in
which the other parties were both viable, competitive and offered clear
alternatives? It was called 1992.
A LESS SPECIAL RELATIONSHIP
By the time you read this Liberator, the result of the US
presidential election may be known. Liberal International British Group’s forum
on the subject in October saw Lib Dem chief executive Chris Rennard and
Democrats Abroad chair Bill Barnard both cautiously optimistic about Barack
An Obama win will neutralise much of the anti-American feeling in the UK and
elsewhere in Europe, stoked by the widely-hated incumbent. In general, this
country likes Democrat presidents and mistrusts the Republican party’s
warmongering religious fanatics. The latter have been exemplified by Sarah Palin,
whose views would disqualify her from serious office in most of Europe.
There is not much to be done about the self-styled ‘leader of the free world’
being elected without most of the free world voting on the matter. But things
can be done about the cringing before America that led to British participation
in the Iraq war.
We cannot influence their choice of president, but we can influence Britain and
Europe’s relationship with America. Every post-war political leader of every
party in Britain, with the exception of Harold Wilson (on Vietnam) and Edward
Heath (on Europe), has blindly followed whatever line comes from Washington.
The friendlier climate that will prevail should Obama win may allow space in
which a less craven relationship can be developed.
Click here to return to the home page.