This week’s supposed ‘grilling’ of four of the UK’s most notorious bankers by the House of Common’s Treasury Select Committee was a confirmation, if any was needed, that white collar crime in the highest reaches of the banking sector will remain unpunished by New Labour.
With very few exceptions, the members of the Treasury Select committee failed to ask questions that seriously compromised anything other than the already tattered reputation of Fred Goodwin, Tom McKillop, Henry ‘Dennis’ Stevenson, and Andy Hornby. The session sadly echoed the not-so-implicit message of one of Steve Bell’s latest cartoons, in which Gordon Brown’s face is represented as an unsightly protuberance emanating from the huge ass of one of the UK’s banking fat cats.
Alas, there were two significant, and no doubt unexpected by-products of the Select Committee’s rather lame effort to pretend to be tough on neoliberal banking, and tough on the causes of neoliberal banking: the first is the resignation, announced yesterday, of James Crosby, HBOS’s former capo di capos and one of the central figures of the financial fiasco, albeit a man that remained until yesterday a high-level government adviser ensconced, of all places, in the FSA, the British authority charged with regulating the banks.
The second is the extraordinary fallout of this process for Gordon Brown. The paradoxical significance of Crosby’s resignation is that it provides, for the first time, unambiguous evidence that the prime minister has remained in the pocket of the big bankers. Despite everything that has happened over the last year, and despite the many emanations that have come from New Labour’s own arses, the New Labour government has allowed a man that was manifestly entangled in the dangerously unregulated practices of the big banks to become, er, yes, a regulator of those same practices. It is a symptom of the corruption of our times that even as the mentioned events were unfolding, an article was headlined by the Guardian that tried to suggest that ‘Like many bankers brought into government of late, [Crosby’s] expertise is invaluable’. Aside from being rather poorly written, that passage just about summed up the logic of the UK’s neoliberals: bring in the cons because they’ve got ‘invaluable expertise’. Expertise in what?
Neoliberal diversions to one side, the conclusion has to be that New Labour not only let Crosby get away with financial murder—as denounced by Paul Moore, the former head of ‘regulatory risk’ at HBOS— but also rewarded Crosby by bringing him into government, via the FSA. In effect, New Labour put one of the senior culprits behind the banking fiasco into the FSA even as it pretended to crack down on the banking mafiosi. The suspicion now has to be that Crosby has been one of the more powerful voices ‘cautioning’ the government against managing the banks in accordance with a post-free-marketeering agenda. Crocwatch can also well imagine that he played a central role in ‘regulating’—a better word would be ‘facilitating’—the merger of HBOS with Lloyds.
Clearly, this blog is not the only one to interpret the events as evidence of a manifest conflict of interest, if not of abject corruption on the part of New Labour. The media have once again begun to fly in slow, high circles above Brown and his party. They now know for a fact, as we all do, that New Labour continues to engage in precisely the same political practices that it did prior to the collapse of Northern Rock. The name of the day continues to be corporate clientelism, the kind of practice that was reportedly backed recently by Peter Mandelson and by Hazel Blears. As an article in the Guardian put it, ‘It was suggested that at today’s meetings [about the bankers’ bonuses] the business secretary, Peter Mandelson, and the communities secretary, Hazel Blears, warned against throwing away Labour’s hard-won reputation as an ally of business.’ An ‘ally of business’?! Hazel Blears has been comprehensively ‘deflatulated‘ (the political equivalent of ‘deconstructed’) by Monbiot. Who is going to do the same with Mandelson? Let us not forget that Mandelson, the arch Blairite neoliberal, was himself reinserted in front-line politics by Brown long after the current economic crisis got under way…what does that say about where New Labour continues to be headed?