THE plain speaking by Bank of England director Andy Haldane in today’s newspaper chimes with his upbringing in a proud county that still places a premium on thrift.
Born in Guiseley, he studied at the University of Sheffield before beginning a career which has seen him become one of this country’s most influential financial regulators and tipped by some to be a future governor of the central bank.
Yet what is striking is Mr Haldane’s honesty. While he accepts that taxpayers had to rescue the stricken banks in order to avoid the social consequences of the Great Depression, he does, at least, acknowledge the public’s dismay that they have been forced to foot the bill for behaviour that was “unjust, wrong and intolerable”. If only the bankers concerned had demonstrated some contrition at the time and accepted their culpability.
The sense of injustice identified by the Bank’s executive director for financial stability lingers to this day.
The recklessness of many banks led, directly or indirectly, to the closure of many businesses. However, while many families continue to pay a heavy price for the financial crisis and recession, there is now growing unease that parts of the financial sector are, once again, embracing the bonus culture which fuelled the 2008 crash.
Yet, while competition remains fundamental to a capitalist economy, there still needs to be the right regulatory framework in place so that a banking crisis cannot compromise the future finances of an entire economy. As Mr Haldane says: “You cannot have capitalism without failure. That’s like politics without elections. It just can’t work. Capitalism without failure is communism.”
The implication is that there needs to be more banks, and greater competition between them, if lessons are to be learned. This is correct and society can play its part – a greater onus needs to be placed on consumers, and especially those who deplore the behaviour of the banks, to vote with their pockets and support those institutions that recognise the importance of corporate and social responsibility.
There also needs to be an onus on the international community to put in place mechanisms which limit the global fallout if a country like China suffers a major financial crisis. Not enough is being done to achieve this consensus.
Mr Haldane is right when he says that “society won’t tolerate a repeat performance of what we have seen” – the issue now is whether bankers and politicians grasp this in sufficient numbers. That is the proverbial million dollar question.
Where does responsibility rest?
A SCANDAL that continues to shock, the neglect of patients in Staffordshire became even more shocking yesterday when fresh details emerged about the circumstances which led to the death of 66-year-old diabetes sufferer Gillian Astbury after two nurses failed to give her insulin – the most basic of care.
In many respects, the size of the potentially limitless fine that is due to be levelled against the scandal-hit Mid Staffordshire NHS Foundation Trust is immaterial. It will not bring back Mrs Astbury, or the other patients who suffered needless deaths. And it will not help the NHS finances at a time when taxpayers want more money spent on care.
However this is not the fault of the court – the fact that the prosecution of the troubled Trust was brought under health and safety legislation means that a fine is the only sanction available.
This is not an isolated case – there is deep unease locally that taxpayers will have to foot the bill after York College was fined £175,000 and ordered to pay court costs of £45,000 in connection with the tragic death of three-year-old Lydia Bishop, whose neck became caught in a rope.
Yet, with the NHS, where does the buck stop? Should it be with the nurses contended who might have been short-staffed on the shift in question, the sister or consultant in charge of the ward or the directors of the relevant NHS trust? It is a dilemma not made any easier by yesterday’s revelation that even more hospital foundation trusts are in financial difficulty.
Activists blame the grouse moors
HOW preposterous can you get? By blaming grouse-moor owners for the flooding catastrophe, the Yorkshire protest group Ban The Burn showed remarkable naivety when it staged a mop and bucket protest outside Natural England’s offices in Sheffield.
There will be little sympathy locally these environmental activists who contend that the burning of blanket bog, a centuries-old process crucial to conserving the natural wonder of the countryside, creates sufficient water run-off to flood towns and villages in the vicinity.
These protesters clearly do not appreciate the simple fact that Britain’s rivers and coastal defences could not withstand the record amounts of rain that fell in January according to official statistics. And they also seem oblivious to how the crisis has been exacerbated by the Environment Agency’s failure to dredge rivers, and the perverseness of those successive governments that sanctioned the construction of new homes on flood plains.
Many lessons need to be learned from these floods, but they need to be driven by people who understand rivers and the climate.