Glyn Ford wants to know why there is no judicial reckoning for those who brought about the financial crisis
WHY does much of the British population seem to be in denial? A crime has been committed and 60 million people have been collectively mugged. The current financial crisis has cost every single man, women and child in this country something between £10,000 and £20,000. A combination of Government deregulation, greedy bankers and cowardly officials has put the future of companies, communities and families at grave risk.
It’s not the first time this lethal cocktail of indifference and incompetence has led to disaster. The BSE crisis had similar origins. The ever-lighter hand of Tory regulation allowed corner-cutting farmers to feed chicken shit and powdered sheep skeletons to their cows, while scientists who well aware of the dangers produced reports so mealy-mouthed that no one understood what they were trying to say.
Yet we don’t seem to learn from our mistakes. The toxic mix of greed and ineptitude has led to a new and worse disaster. Self-regulation left the lunatics in charge of the asylum with morally-challenged traders and bankers devising more and more esoteric and risky ways of gambling with other people’s money and pocketing the profits which they spent on conspicuous consumption that was never in a million years going to trickle down to the residents of the housing estates of the country’s inner cities.
The Financial Services Authority was supposedly overseeing these people and their. However, over several years, its officials singularly failed detect any evidence the emperor was completely stark naked. Now Gordon Brown’s Government has very little choice in terms of its broader intervention to prop up the banking system.
Yet what remains confusing is that we seem to have a perpetrator-less crime. Who has apologised for the bankers’ avarice and perfidy that has caused the present economic catastrophe? Who has been sacked, fined or sent to jail for their criminal greed, recklessness and stupidity?
Even George Bush’s late and very unlamented administration in the United States made Britain’s authorities look like toothless pussycats. NatWest bankers and media moguls involved in the Enron scandal of 2001 and the collapse of Conrad Black’s empire in 2003 were not brought before British courts. They only faced the music when US authorities decided to prosecute them.
If what the bankers and traders did was not illegal, then logic dictates those responsible for various oversights and the horrendous consequences of them are the guilty ones. Dangerous driving is a criminal offence and those found guilty of it can end up behind bars. Why is there no offence of dangerous banking when its consequences can be orders of magnitude worse? Why are these dangerous bankers merely being tormented by the prospect of reduced bonuses and not the prospects of a prison cell? Why aren’t we looking at freezing their misbegotten assets? Why are there no commissions or public inquiries investigating the crime so that we can all learn lessons for the future?
Why was Adam Applegarth, who left Northern Rock in a financial shambles, paid £750,000 to leave his post as chief executive instead of being asked to explain himself to the police? How is that Sir Fred Goodwin, the former chief executive of the Royal Bank of Scotland who was paid £4.2 million in 2007 and
who jumped ship in 2008, still has all his £8 million pension after RBS announced a truly staggering loss of £28,000 million last year?
There was talk of stripping Jeffrey Archer of his peerage after he went to prison for perjury. Sir Fred is still free to enjoy his pension, even if the value of it has been somewhat diminished, and is still in possession of his knighthood for services to banking.
Why is the effective nationalisation of the banks not being exposed as a shotgun marriage between them and the Government that has been forced on the Treasury by criminal negligence and wrecklessness? For the left, the purpose nationalisation used to be to secure for the workforce a share of the fruits of their collective labour that would otherwise be monopolised by private capital. It was an admirable sentiment, even if in practice it stultified innovation and bred inefficiency.
But now, with the billions of taxpayers’ money the banks have received, that arrangement is being stood on its head. It is as if Sheriff of Nottingham is riding to the banks’ rescue, robbing the poor to pay the rich. The British people are being collectively burdened with the debts of stupid but wealthy bankers whose idea of a night out is quaffing £1,000 bottles of champagne. The plans for a “toxic” bank should be simple to implement – after all that’s exactly what bankers have been creating for the past two decades. It’s the non-toxic bank that might prove trickier.
Meanwhile, some of the bailouts are sending the wrong message to the public. Of course, those who have got into trouble through no fault of their own need support. But this does not include the greedy, the ignorant and the speculators.
The prudent, the financially knowledgeable and those too poor to get onto the housing ladder have already been made to pay the bankers’ debts. Now they are being asked to help keep some of those bankers keep in their second, third and fourth homes, support those who borrowed 10 times their salaries to speculate on a supposedly never-ending housing boom, or those who, often in collusion with unscrupulous mortgage brokers, wrote complete fiction on their mortgage applications forms. Why should anyone act responsibly when we see greed and stupidity bring the Government to the rescue after it transpired that the maths didn’t add up and common sense was conspicuous by its absence?
Unless the guilty pay the price for the current fiasco, there will be a backlash. There are already signs of this beginning. People are looking for justice and retribution. It’s a class issue.
It was right initially to concentrate on rescuing the situation. But now it’s time to bring to account those who drove us on the rocks in the first place. Bernard Madoff, the New York financier who defrauded his clients of £35 billion, is probably going to jail for a long time. It would be criminal if he didn’t have company.
Glyn Ford is Labour MEP for South-West England and Gibraltar
