Archive for David Cameron

If Cameron wants a Thatcher Moment he should go after the bankers!

Posted in Banking, business with tags , , , on June 28, 2012 by Tom Leatherbarrow

A few months ago the Government saw great opportunity in the proposed tanker driver strike.  The word from Tory Central Office (we know this because it was all over the newspapers) was that the Government saw the dispute as a potential ‘Thatcher Moment’ when the Government rallied the general public around a foe that threatened the economic prosperity of the country and defeated it, just as the Lady had with the miners.  Francis Maude was duly sent out with the advice that we should all stock up on petrol by filling jerry cans, just as the Thatcher Government had stockpiled coal.  We all know how it ended.

My feeling at the time was that the Government was fighting an old battle.  Much has changed since the long summer days of 1984.  The Public & Commercial Services Union went on strike over outsourcing of jobs on Monday, did you notice?  I suspect not because three separate tranches of legislation, the Prior Act, the Tebbit Act and the Trades Union Act of 1984 have brought the unions into line, democratised them and left them needing to listen to their members before the shout goes up “everybody out.”  If they step out of line the penalties can be ferocious, as the miners found out.

So where should the Government look if it wants a ‘Thatcher Moment’?  News comes this morning of another powerful pressure group who threaten the economic prosperity of the country. In fact this pressure group has already been bailed out once by the public to the tune of hundreds of billions.

One suspects that Barclays £290 million fine levied by both the Financial Services Authority in London and the regulators in the United States for manipulation of interest rates is just the tip of the iceberg. If RBS, HSBC etal get sucked into this then the entire integrity of UK banking and LIBOR (London Interbank Offered Rate), which is used to fix mortgages amongst other financial instruments across the globe, will be called into question.

I could go over, once again, all the arguments for dealing with the bankers, including the ‘too big to fail’ argument, bonuses, lending to small businesses, the rebuilding of balance sheets with QE money, but why bother?  All you need to do is Google any of Mervyn King’s, the Governor of the Bank of England’s comments over the last few years to see how worried he still is.

I have no doubt that the bankers will want to position this as a victimless crime, but somebody, somewhere is always holding the dumb money.  If it is found that it is the general public, among others, who have been screwed over once again this story has the capacity to make the leap from the business pages to the front pages.

If Cameron wants a ‘Thatcher Moment’ which cuts through to Joe Public or Worcester Woman, this morning it is staring him right in the face!

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Is the Daily Telegraph changing sides?

Posted in Media, Politics with tags , , , on March 9, 2012 by Tom Leatherbarrow

Where do you go if you want to read a stinging rebuke of this Government? Most of us would probably automatically turn to the Guardian or the Indy, but recent months have seen a torrent of invective delivered from writers at the Daily Telegraph of all places.

The last 48 hours are a classic case in point. First Ed West, journalist and social commentator with a right leaning bent, laid into Cameron comparing him to Ted Heath no less. In Tory-land there is no lower blow than this!

Apparently, Ed, who is widely regarded as a ‘one-to-watch’ up and coming political commentator, says Cameron will lose the 2015 General Election (he’s willing to put money on it) as he refuses to come up with a coherent policy on all manner of issues from immigration through to crime.

Within minutes of Ed’s rant, James Delingpole, another up and comer, laid into Dave & Co quoting the following. “The problem is that policy is being run by two public school boys who don’t know what it’s like to go to the supermarket and have to put things back on the shelves because they can’t afford it for their children’s lunchboxes. What’s worse, they don’t care either.”

As James noted, this quote doesn’t come from Vince Cable, as you might expect, but from Nadine Dorries, Tory MP for Mid-Bedfordshire.
It gets worse for Dave. Yesterday, one of the big commentator beasts, namely Peter Oborne piled in. Whilst making a number of brilliant points (the Coalition won’t last until 2015 is the key one) he comes out in support of Vince Cable and against George Osborne.

“The fact is,” he says, “Mr Cable has a reasonably worked-out and coherent grasp of political economy, whether one agrees with it or not, and Mr Osborne does not. A large number of Tories want Mr Cable out. They are very stupid.”

So what is going on? I was fortunate to chat with Mike Foster, former Labour MP for Worcester last night and his feeling is that the Conservative Party remains furious at Cameron for not winning the last Election outright and forcing them into a coalition.

True or not (I think it is true just to get off the fence for a moment) this sort of coverage (and many of the comments posted underneath which are in broad agreement with the writers) spell trouble for Project Cameron. Not least because the latest polls show the Labour Party has a steadily widening lead in the polls.

Dave is throwing himself to the Lion!

Posted in Politics with tags , , , , , on February 16, 2012 by Tom Leatherbarrow

The Prime Minister just got slapped down on the BBC.

It’s something I suspect we are going to have to get used to over the coming years.

Gordon Brown made a lot of mistakes, but he also got a lot right, bailing out the banks in October 2008 and not allowing Blair to join the Euro immediately spring to mind, but there is also another trap which he had the wiles never to fall into. He never, ever went up to Scotland and publicly took on Alex Salmond, Scotland’s First Minister, toe to toe!

The current Prime Minister is a confident man and the Number 10 Press Office has obviously felt able to trail his speech in Edinburgh today on the future of the United Kingdom and the Scottish Referendum on Independence with plenty of leaked soundbites.

He will say we are “stronger and richer together”. He will go on: “I think we have a fairer country, a better country, a richer country with all of us together. But I wouldn’t ever threaten people in Scotland or say they can’t do what they want to do. I’ll just be appealing as someone who loves the United Kingdom, who loves our shared home.”

All very nice, but then he makes a huge mistake that Salmond has already leapt on. “We’re stronger, because together we count for more in the world, with a permanent seat on the United Nations Security Council, real clout in NATO and Europe and unique influence with allies all over the world.”

Oh dear, oh dear. This is Salmond’s response, the words of a consumate politician who understands his electorate and their concerns. Read on or watch it HERE. I warn you from abourt 46 seconds in it is men against boys stuff!

“I was arguing about progressive policies, to bring jobs to the people and prosperity, he’s talking about being on the Security Council of the United Nations. Now no doubt that is important but believe me that doesn’t mean much to someone with disability or someone fearing the loss of benefits; a young person looking for a job in Scotland. I think the Prime Minister had better understand that Scottish politics is about a positive vision for the future; it’s about people not prestige.”

One nil to Salmond. At this rate it will all be over by half time.

Coalition splits: fact or media strategy?

Posted in Banking, Politics, PR with tags , , , , , , , on January 30, 2012 by Tom Leatherbarrow

I listened to Shadow Chief Secretary to the Treasury, Rachel Reeves, speak at a lunchtime meeting at KPMG in Birmingham on Friday on the state of the British economy (she thinks George, as you would expect, needs a Plan B).

Anyway, amidst some interesting perspectives on the economy and the UK’s relationships with the rest of Europe, she made a very interesting point about the current travails of the Labour Party. “It is” she said “very difficult to get your case heard when all the media talks about is potential splits in the Coalition.”

This got me thinking, because there appears, at the moment, to be very little downside for the Coalition when a split story appears. Firstly, split stories highlight the separate identity of the Liberal Democrats. What’s more these stories play into the hands of the Tory leadership who are able to say to their more radical parliamentary colleagues “look, we’d like to be more radical but the LibDems won’t let us!”

Furthermore, the Westminster lobby loves a good story about rows and tantrum throwing, much more than a story about policy (yawn!). Finally, and most importantly, from a Coalition point of view, talk of potential splits drowns out what the Opposition has to say on any given issue. Why go looking for a contrarian view when a good row is served up to you on a plate!

So, I ask the question, are these splits factual or are they part of an overall media strategy? I’m beginning to err on the side of the latter. Last week the Deputy Prime Minister basked in good headlines for his championing of the abolition of the £10,000 tax band, which provoked much ‘analysis’ from Westminster commentators suggesting that the Chancellor would not be best pleased. By Friday, it turned out that the Treasury had approved the Deputy Prime Minister’s speech in advance.

I’ll let you decide for yourself!

PS: a quick take on Stephen Hester’s bonus. The big political issue here is not whether Stephen deserves it or whether he feels sufficiently incentivised by his £1.2 million base salary. No, the big issue is that the Prime Minister talked of ‘moral markets’ and giving power back to shareholders over remuneration whilst allowing Stephen to pocket a £963,000 bonus whilst in charge of a nationalised bank.  That is a credibility gap!

Cameron’s Veto: is this a Waterloo or an Arnhem?

Posted in economics, Politics with tags , , , , , on December 12, 2011 by Tom Leatherbarrow

Sometimes it is best to wait before blogging on events. I took this view on Friday before commenting on David Cameron’s veto at the EU Summit. Better to wait and think through the implications before hitting the keyboard.

Depending on which newspaper you have read over the weekend, individual views on the veto will differ. If you are a Telegraph or Mail reader it is likely to be the greatest British victory on the Continent since Waterloo. Guardian and Independent readers will doubtless form the view that the UK is about to be thrown out into some sort of diplomatic nuclear winter. Readers of the Economist will probably conclude that the Prime Minister didn’t really have a clue what was going on and hopelessly overplayed his hand!

So what is the truth of the matter? My own view, having given it much thought, is that the leaders of the UK, France and Germany are engaged in a game of high stakes poker with bluff and counter-bluff the order of the day.

Whilst this may seem like a European issue, national considerations are playing a key role. The French President, deeply unpopular at home, faces re-election on April 7th. He faces his electorate with an economy tanking, rising inflation (anybody who has been to France recently will notice how expensive it has become), a cut in his country’s credit rating and his major banks all but bankrupt. Out of the fog, his election strategy is becoming clear. He intends to say: “It’s not my fault, it’s those Brit’s and their dodgy banks who have infected all the rest. But don’t worry, I’ve thrown them out of Europe, so vote for me!”

Chancellor Merkel does not face re-election until September 2013, but if she is to stand any hope she needs to whip the rest of Europe into shape double-quick. However, the German public is deeply unhappy with having to prop up other countries. They haven’t gone through years of fiscal austerity only to go bust bailing out the Greeks and Italians.

Similarly, Frau Merkel’s strategy is also becoming clear: “It’s not my fault, we need much closer fiscal integration to make sure we, sorry I mean the EU, has oversight of other country’s budgets so they can’t do it again. Vote for me!”

Of course the irony is that European leaders still think they are in charge of events. The reality is that the bond markets will have as much, if not more, say in how events unfold. The key point of last week’s summit is that it did absolutely nothing to solve the immediate liquidity crisis that is enveloping the Eurozone. The ECB still can’t buy bonds, we have no Eurobond, yields are going through the roof (as I write Italian ten-year bond yields are up by 15 basis points and rising) and the ratings agencies are downgrading as fast as they can type.

So what is the PM’s game? Like his European counterparts he is also looking over his shoulder at the Eurosceptics within his own party. My guess is that the PM has made the calculation to temporarily appease the Tory right in the hope that he sees the back of President Sarkozy in April. Alternatively, the whole Eurozone could go bust and break up at which point last week’s veto won’t make a blind bit of difference.

The nightmare scenario for the PM is that the French socialists fail to get their act together and split their vote, which last time let in Jean Marie Le Pen of the National Front. In 2007 the socialists had to swallow their pride in the second round of voting and get behind Sarkozy to keep Le Pen out.

We are therefore in the extraordinary situation that a British Conservative Prime Minister is hoping for a socialist victory in France so that he can get rid of his arch-enemy and, he hopes, break up the Merkel/Sarkozy relationship.

Today, the Prime Minister basks in the adoring headlines of the right wing media comparing his triumph to Waterloo. He must hope that the reality is not more like an Arnhem, where a flawed strategy and faulty intelligence led to annihilation.