I just watched snippets of David Cameron's "responsible economy" speech on BBC News 24 and found myself yelling at the screen for answers rather than soundbites. I struggle to recall anything the Tories have been saying about what they would have done to avert this financial crisis / global economic armageddon or what they would do in future. So I was actually forced to visit the Conservative party website to find the full text (I know, I'll be showering later).
Now, though, I'm even more confused than I was before. It seems a generally accepted fact that the current problems stemmed from a lack of rigorous regulation, of not enough people understanding the complex investment packages that were being sold around the banking system so nobody at the top had the ability to pause and say 'hang on, that all looks a bit stupid' (obviously, this is heavily simplified. I will shortly be posting an explanation of the financial meltdown and what it means for us, using illustrations nicked from Terry Pratchett).
Centre-right parties are not keen on regulation (witness Sarah Palin getting into all sorts of messes in some of her early speeches). Centre-left parties are, theoretically, more keen. But one of Gordon Brown and Nu Labour's problems has been that their economic policies are more like those of any centre-right party you want to mention. When the CBI demands light touch regulation, the government jumps. And you can criticise this (and I do) but let's also be realistic: big business holds a gun to the heads of government and threatens to take its business (and its jobs and tax revenue) elsewhere if countries don't give them what they want. I saw someone on TV earlier this week wondering whether the government's nerve in adding strings to the latest banking bailout, would trigger companies into thinking about moving to Bangalore or Dubai. The ungrateful bastards.
Gordon Brown did some quite Tory things with the markets. And given the global nature of capital flows and the sources of the banking meltdown, I find it hard to imagine that tougher national regulation would have insulated Britain from much of the problem anyway. So what's Cameron saying?
"We need strong, responsible and proper regulation of the financial systems that underpin our economy – another traditional role of the centre-right."
He's kidding, right? Yes, we do need strong, responsible and proper regulation, but when did a centre-right party ever do that?
"I believe in markets that work – not in the assumption that laissez-faire is enough."
Did I miss something? David Cameron's tentatively rejecting laissez-faire? Has he run this by the rest of the party?
"We regulate utility companies – and there is a good reason."
You sold them all off.
"So we will ensure that we get more good staff at the FSA, paid for by an increased levy on the City, and introduce a system similar to the Shareholder Executive so that banks send their best people to the FSA on secondment."
While paying people at the FSA more is great, seconding people from the banks is not so much. Shouldn't the regulators be separate from the thing they are regulating, rather than the same people? Regulators need to understand their industry, but that's why paying competitive salaries in itself should attract people with the right skills and experience, rather than borrowing people from the industry itself.
Then there's a lot of stuff about national debt, and overpriced housing, and personal consumer debt, and how it's a bad thing. This is true, but it's also the precious free market at work. I have no idea what this "independent Office of Budget Responsibility – which will hold every government to account", which he seems to think will solve the debt problem, is. Not much detail.
"We need a cultural change on the part of bankers too. No longer must they think just that because they are abiding by all the rules, morality goes out the window. Instead, they must recognise the massive responsibility they have to our society. The Executives at the very top of our banks were paid according to the short-term profits they made, rather than the success of any long-term decisions they took."
Yes they did, and it is appalling. But again, isn't that the market in action? Bonuses and dividends are paid according to annual profits, aren't they? Cameron follows this up by suggesting some ways that might (might) have been useful in handling the causes of the current crisis, but it's not going to happen the same way again, is it? The market is constantly coming up with new and increasingly complicated ways to make a quick buck. Nothing he's saying in this speech is addressing the fundamental issue: that the market demands fast profits and rewards those who produce them.
The essence of Cameron's speech seems to be "We need… responsible free enterprise, regulated and supported by responsible government." Which I'm sure would be lovely, but – and here's my problem – I still have no sodding idea how the Tories plan to do it. I simply don't believe they're willing to enforce more regulation than Labour, or that they have the stomach to face down big business – their traditional support base – to achieve it. And, given that these people will probably be running the country in a couple of years (don't believe this recent 'Brown bounce') that's slightly concerning.