Ian Aitken – Rattling the Bars
IT IS a measure of just how far revisionism – or perhaps we should call it defeatism – has penetrated the modern labour movement that the current turmoil on the world’s financial markets has produced only a little sorrowful hand-wringing among ministers rather than the outburst of vigorous anti-capitalist anger which would have been the reaction of past generations.
Yet this present crisis – and it is a crisis – has been generated almost exclusively by the naked greed of the boys in red braces in the City of London and on Wall Street. It is their increasingly frenzied search for the quick profits required to feed their multi-million pound bonuses which has led to the so-called sub-prime mortgage panic and the parallel crisis of liquidity among British banks. When even Barclays is feared to be in trouble, we are facing something close to a capitalist meltdown.
Only a few decades ago, the response even of a Tory government would have been to consider taking failing institutions like Northern Rock into public ownership. Edward Heath – arguably more of a socialist than the present incumbents of Whitehall – did that with several collapsing manufacturing giants. The actual response of this Labour Government has been to bail out the very people who led Northern Rock into a situation in which it could not continue to finance its dodgy dossier of mortgage loans.
In fact, Heath coined a phrase about red braces greed which has entered the language. He was talking about a scandal in 1973 in which Lonrho, the vast mining and trading company headed by “Tiny†Rowland, had been caught paying out huge sums for various business contracts. One of the beneficiaries was Duncan Sandys, a Tory grandee who was both a former top Cabinet minister and a son-in-law of Winston Churchill.
Sandys was exposed as having received £130,000 for unspecified services to Lonrho. That was bad enough, but what made it much more unsavoury was that he had specified that the money should be paid into a secret account in the Cayman Islands where it would escape the taxes which Sandys and his Cabinet colleagues had been imposing. There was general uproar in the House of Commons over this disgraceful example of individual and corporate greed, with Labour MPs in the vanguard. But the Liberals, too, were angry and it was Jo Grimond, their charismatic leader, who drew the crucial phrase from Heath. Challenged by him during Prime Minister’s Questions, Heath replied memorably that the Lonrho affair and Sandys’ part in it represented “the unpleasant and unacceptable face of capitalismâ€.
We have come a very long way since then, when a single payment of a mere £130,000 could move a Tory Prime Minister to such a stinging denunciation of the economic system of which he was supposed to be the defender. Nowadays, there is tax-dodging on an industrial scale, institutionalised corporate corruption goes uninvestigated and the deregulation of the City of London’s ever-present greed has brought us the first run on a British bank for more than 150 years.
So why can’t one of our sanctimonious, God-bothering ministers say something similar to Heath’s memorable phrase about the disgraceful state of affairs in our financial markets? The answer, I fear, is all too simple. It was these same ministers who took over and even extended Margaret Thatcher’s wholesale dismantling of the regulations which had previously held the City of London in check.
It is this deregulation process which gave the red braces brigade the go ahead for the recent orgy of dodgy speculation. And, worse, it is the reason why we are right to be worried about a possible collapse of world markets. Just after the Second World War, banks and economists had learned the lessons of the inter-war slump and constructed the network of regulations which they believed would prevent a repetition. To a frightening extent, this has gone now.
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A FRIEND of mine called Brian Rea died recently. He was an interesting chap, a diminutive former officer in the Royal Engineers who was cashiered, improbably, for smashing a beer bottle over the head of an-off duty military policeman. He was married five times, and always referred to his ex-spouses as “Number Two†or “Number Fourâ€. He had a weakness for Scotch whisky, but didn’t like the taste and drowned it in Diet Coke.
Although he existed on a very modest pension, which he supplemented by doing a bit of washing and a little gardening for friends, he had a regular Saturday routine. He would don his smart pearl grey suit, knot a dazzling silk tie round his neck, tuck a matching hankie into his top pocket, and go off to the Ritz. There he would drink exactly two glasses of champagne and lunch on its free bar snacks. “I can just afford it, if I’m carefulâ€, he explained.
I would not draw the attention of Tribune readers’ to Brian’s life, extraordinary though it was, if it were not for a further fact about him. Towards the end of his working life, he was for some years the secretary of my local hospital, the Whittington. As you might deduce from its name, it is on Highgate Hill, which – as every panto-going child knows – is where Dick Whittington famously got his “turn again†summons to be Lord Mayor of London.
As Brian proudly boasted to anyone who would listen, he ran the hospital – in partnership with the matron and the top medical consultants – with an office staff of precisely eight. Now, he would add scornfully, he and his little team have been succeeded by hundreds of so-called managers, who he reckoned did the job rather worse.
He probably had reason to know this, as he virtually had a season ticket to his old hospital’s accident and emergency department. In the end, he died in one of its wards.
