Monday 15 June 2015

The drip drip drip of distortion.

By convincing the bulk of our electorate that the world economic crash was all the fault of Britain's Labour Party, and that they themselves were economically competent,  Britain's Conservative Party has pulled off what must be the greatest PR coup in modern political history.  However, they are not letting the matter rest there.

I was in a walking holiday in the Lake District last week, so did not study George Osborne's Mansion House speech in any detail.  However, I did catch a brief news bulletin and I'm pretty sure he said that the Labour Party (or the previous government) had "nationalised" (my emphasis) the Royal Bank of Scotland (RBS) and it was this government's duty to return it to the private sector.

The world "nationalised" must have been chosen with care.  Most people would have said that the previous, Labour, government "rescued" the bank. It might even and fairly be added that, by doing this promptly that government prevented an even greater financial melt-down, and that by persuading the Americans and others, through the G8, to take similar action, Labour prime minister Gordon Brown was instrumental in averting a greater financial catastrophe throughout the capitalist world.

But no, it was "nationalised":  perfectly accurate, but mildly pejorative in the UK context, and very much part of the Old Labour image which the present party is trying to shed.

So the drip drip of distortion continues. Nationalised bad -  private enterprise good.  Public sector bad - private sector good.  And all without any evidence, except that those in the private sector able to buy RBS shares at knock-down price will do very nicely out of it.

Sadly, Osborne is missing a golden opportunity to facilitate one of his own stated objectives, to promote prosperity throughout the nations and regions of the UK rather than see it concentrated in London and the South East. 

RBS, as a unit "too big to fail," could be retained in public ownership but split into a number of regional banks, each charged with the responsibility of  providing capital at reasonable rates of interest to small and medium-sized enterprises in their regions.  I understand such banks exist in Germany and have contributed considerably to that country's prosperity.

Instead Osborne takes the opportunity for a short-term boost to his deficit reduction plans, and to further  fatten a few already  fat cats.


  1. The wisdom or lack of it in the case of the RBS is too arcane a matter for most citizens to follow.
    What is all too clear is the success of Tory propaganda in fixing the blame for economic disaster on Labour.
    'The great Lie' of the 21st century is now accepted by just about every economic commentator in Britain.
    As Hitler and Goebbels knew - if you are going to tell a lie, make it a big one.
    It is depressing that after almost 150 years of state education they can get away with it: or perhaps that is one reason why they succeed?

  2. True, "most citizens" will not understand about RBS unless some leading politicians have the guts to raise the issue, explain, and get themselves reported. Unfortunately the Labour party are too timid to put forward anything seen as remotely radical (and, as in 2010, too absorbed in heir leadership contest to offer any effective opposition.)

    I can't agree that "just about every economic commentator" has accepted the "big lie." It depends on which ones you read. In last Sunday's "Observer" William Keegan has an article with "Big Lie" in the title (and with capitals) and writes, among other things "The truth is that the deficit was not the problem: it was the solution. Worth a look - 14th June (I don't know how to do links from a "comment box.")

    1. PS Also an article by Amartya Sen in last week's New Statesman (5 - 11 June).