Gary's News and views
Gary writes a weekly article which appears in the Plympton Plymstock and Ivybridge News in South West Devon. The articles are published here.
Saturday 28 July 2012
WANT A JOB SORTING OUT THE BANKS?
Have you ever been between a rock and a hard place? That is where the UK is with its banking industry right now and the way forward is far from clear.
The rock? The UK financial services sector accounts for over 10% of all of our country’s economic activity and without it we would be in even deeper trouble. London is the world’s premier financial capital which is a significant boost to the economy.
The hard place? Investment bankers have behaved disgracefully in recent years and, driven by personal greed on a massive scale have triggered a completely avoidable credit crunch and recession. The bonuses they have paid themselves have engendered public anger that I have not encountered before.
The decision to take regulation away from the Bank of England in the late 1990’s and give it to the Financial Services Authority proved disastrous and appeared to foster a reckless attitude, knowing they would not be detected. Sub-prime lending, Libor fixing, short term deals driven by profit, inappropriate swap products sold to the wrong people, we have all read about it. Sadly this was all driven by a short term focus on personal profit.
But the dilemma is this: if we hit UK banks and bankers too hard they will up sticks and remove themselves to another jurisdiction and instead of getting 40% of all their profits to help fund our public services we will get 100% of nothing! Tokyo, Frankfurt and New York are already pitching like mad to get them to relocate.
What we really need is a change of culture within the banking industry. When I started as a lawyer in the 1980’s bank managers appeared to be on the side of their customer, whom they had probably known for years and gave good independent advice. Over thirty years this role developed into that of a glorified sales person, trying to sell you more of the banks products.
The government is insisting on certain changes. We are going to force banks to separate their high street (retail) services from their investment arms to prevent the cross contamination we have seen recently. We are going to tighten the regulatory regime and give it back to the Bank of England. We are trying to encourage banks to lend sensibly again.
But we must allow them enough slack to remain in the UK and flourish. To get the balance right we need the Wisdom of Solomon. Any applicants?
posted by Gary @ 11:11
Thursday 19 July 2012
BREAK OUT THE SHORTS!
This week the House of Commons rose for 6 weeks. For most of us this year's summer break could not come soon enough. The session just ended was as intense and tetchy as any I can remember: a budget that contained some surprising banana skins, a series of u-turns, Euro-Zone problems slowly unfolding, dismay at yet more banking scandals, frustration at slipping into double-dip recession, division and anger over Lords reforms, tensions in the coalition; just another term in the mad house.
The summer is a time for deeper reflection. You may recall I went into last summer's recess saying I was going to ponder the issue of a referendum on EU membership and came out of it deciding that a referendum was necessary and voted accordingly. The pace of life when Parliament is sitting leaves little room for the kind of mature reflection that leaves to grown-up wisdom, so six weeks without flogging to London and back is precious.
It is also a chance to recharge the batteries. There will be daily appearances in the local office getting in the way of my hard working staff, and doing things in the constituency that there is not normally time to do. I read a book once which recommended a leadership style it referred to as "management by wandering about" and I intend to do plenty of this over the summer, just observing and listening to local people.
We also have some long distance horse shows lined up, so I will be powering up the motorway at 55 MPH in the lorry once a week.
After 34 years of Jan flogging around after me (Gary Streeter's wife), I very much enjoy being "Janet Streeter's husband" as she continues to dazzle on her brilliant white horse.
The summer is also a good time to read more widely. I hope to focus this year on morality in the public square, following the series of banking disasters. It comes as no surprise to some of us that when tempted human beings will succumb to greed. You do not have to teach a baby to be bad, but to be good. Human nature. But apart from personal salvation or better regulation for every aspect of public life, or draconian penalties if caught, is there a modern solution to this conundrum?
September will be here soon enough and with it, a quiver full of challenges and stress. In the meantime where are my shorts?
posted by Gary @ 09:41
Thursday 12 July 2012
WETTEST DROUGHT FOR 100 YEARS!!
Whether it is caused by mankind's activity I remain undecided, but one thing is for sure, we are experiencing climate change. I tend to share my farming father's innate faith in the awesome power of the planet that we can do little to impact. Furthermore, when we hear phrases from experts such as "the wettest June for 100 years" it means that 100 years ago there was a June that was wetter – presumably not then caused by global warming as the motor car had just been invented.
But weather patterns are clearly changing, both in the UK and elsewhere, with more extreme climatic conditions taking place, just as predicted. The dramatic events of the past weekend, when the River Yealm broke its banks and many parts of the constituency were flooded, was a local reminder that we face a real challenge.
Whether or not we believe in man-made global warming, we obviously should do all we can to be good stewards and move towards a more sustainable way of creating energy and living. But in the meantime what should we do about the threat of extreme weather?
The short answer is we have to adapt.
We need our experts to get better at issuing public warnings. The Environment Agency was on the ball last Friday and broadcast a red warning for Devon which did enable some precautionary measures to be put in place. Better and earlier warnings on which we can rely must become part of our future.
We must get better at refusing new development in areas where there is likely to be a negative flooding impact on adjoining areas. The value of flood plains and low lying meadows in soaking up excess water and disposing of it slowly cannot be over emphasised.
We all have to get better at small-scale prevention measures. Part of our property is beside a stream and the planners insisted we build a bund (small wall). I was reluctant to incur this expense, but relented, and in the small hours of Saturday morning the water reached the top of the bund but got no further.
Other temporary defences will also have to be considered by those living in places where the risk of flooding is growing.
Government must continue to invest in major schemes to shield the most vulnerable areas as resources permit.
Extreme weather patterns look like being with us for a while. We should take sensible measures to adapt.
posted by Gary @ 09:32
Thursday 5 July 2012
NO TO THE REFORM OF THE HOUSE OF LORDS BILL.
Next week I will be voting against my own government on a three line whip. I will be voting against the House of Lords Reform Bill. I simply do not believe that a directly elected upper house is the right way forward for our country.
I have two main reasons. First of all any elected house will seek to increase its own powers. This has always happened: the US Senate, the Scottish Parliament and the Welsh Assembly all started modestly but have cranked up their clout almost from day one. Currently the House of Lords is a revising chamber only. It can ask the Commons to think again, but in the end we get our own way.
That would slowly change if the second chamber became elected; there would be a power grab and constitutional tensions would gradually increase. This has happened in the USA where gridlock between the two elected Houses is not uncommon. We need this like a hole in the head.
Secondly, a mainly elected House would exclude many wise and experienced people who have achieved much in their lives and have something to contribute from their own backgrounds: businesspeople, charity workers, scientists and the like. There is no way that such single minded achievers would ever stand for elections. What advantage is there to be had in stuffing Parliament full of career politicians at the expense of such practised wisdom?
It is even worse than that. The kinds of people who will seek election to the upper house will be those who really wanted to get in the Commons but were not quite good enough. So a second chamber of second rate politicians in place of wise old birds. Great.
If it does make its way through the Commons as it probably will, it must certainly be put to the people of this country in a referendum. If we have asked the people about devolved assemblies and directly elected mayors, we surely need to seek authority for this massive change.
We would not be doing this if not for pressure from our coalition partners. There is virtually no public support for doing this, especially at a time when other serious issues should be consuming our attention. Of course coalition government must involve compromise, but major constitutional upheaval is too great a price.
I hope to help sink the bill. If our minority partners don't like it we should have a general election.
posted by Gary @ 09:30