Saturday, 21 July 2018

Patronage and The Old Lady of Threadneedle Street

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Anthony Peters reflects on five decades of political evolution and where Britain might be going…

Anthony Peters, SwissInvest Strategist

Although I appear to have conned many readers into believing that I am economist, my first degree was in fact in politics and history. I recall – I don’t know why – that the first essay I wrote as a bright young first year undergraduate was on the topic of “Is Britain becoming ungovernable?”

You need to recall that all this was in the mid 1970s – a period currently being looked into in an interesting series on the BBC – when both public and private sector strikes were as much a part of life in this country as warm beer and footballers in tight shorts. The seventies, with all that was impossible – pop stars with bouffant hair, polyester suits, platform shoes and massively underpowered cars with orange and brown interiors – did not come to an end with the election of Margaret Thatcher but with the Falklands war of 1982.

How should we, the people, be expected to reward our elected representatives for their abject failures by handing them the Lords and the Bank of England?

Anyhow, the point of the essay was to establish whether parliament had lost its sovereignty and whether forces beyond the two houses had displaced them and assumed control of the social agenda. I vaguely recall concluding – as a freshman I still thought that strong opinions were what would be required in order to garner high marks, an attitude which I was soon be disabused of – that the weakness in the political system was in the character flaws of politicians and that a better selection process needed to be found. 

Time has moved on and the political process has since been usurped by a class of professional politicians who leave university and who then follow a well-trodden path through think-tanks, policy study groups and so on and who then get sent out to get themselves elected. Don’t get me wrong; there are still many MPs who come through the more traditional system of local politics, regional politics and on to national politics but they provide the lobby fodder and not the anointed leadership of their respective parties.

There is a simple line of common criticism that the political class lacks contact with “real people” but it is not in that fact that the problem is to be sought. It is about the need to be re-elected – yesterday I referred to the wonderful bon-mot of Jean-Claude Juncker that “We all know what to do, but we don’t know how to get re-elected once we have done it.”

The antidote to this is simply in finding a way to by-pass the electoral process. This United Kingdom has a wonderful institution called the “House of Lords” which has been stripped of most of its hereditary peers and has developed into a sort of a Chamber of Elders, something which Plato would recognise and applaud. How wonderful to have a mixed bag of parliamentarians from the left, the right and the centre who represent a moral but amorphous constituency and not a geographically defined one. It is a chamber than cannot and has no need to buy votes, where doing the “right thing” is more important than currying popularity. As such it is an uncomfortable bedfellow to the professional baby-kissers of the House of Commons.

Now David, “call me Dave” Cameron is trying to lead the charge to make the Lords 80% elected. In the 70s, the call was for the establishment of a unicameral system which would give the Commons a free rein without checks and balances, in other words an elective dictatorship.

The Old Lady

Why the rant? In June next year, Sir Mervyn King steps down as governor of the Bank of England. Already the politicos in Westminster are licking their fingers at the opportunity of getting grubby paws on the Old Lady. Deputy Governor Paul Tucker is in line to move up but there are voices calling for an outsider and a non-economist to be brought into the role. I heard of the need for a governor who is more “politically connected” to be running the Bank. What a load of tosh!

Are we to reward our elected politicians who have let us down so catastrophically as they swapped looser regulation and closed eyes for highly paid seats on corporations’ boards when they finally bowed out of the Commons, by letting them take over the House of Lords and the Bank of England too? Sure, the names which are being put forward as potential Governors other than Tucker are good and worthy people but it risks putting the role in the sphere of political patronage.

As the likes of Bob Diamond will stand up in front of Barclays’ shareholders today, donning their hair shirts as they back down from their bonuses and contritely admit that they do not deserve quite such rewards for failure, how should we, the people, be expected to reward our elected representatives for their abject failures by handing them the Lords and the Bank of England? Maybe worth a thought, no?


Alas, it is that time of the week again. All that remains is for me to wish you and yours a happy and peaceful weekend. May the sun put in that welcome guest appearance over the next couple of days and may your sons also regard you as worthy by popping in from time to time for more than just for Mum’s cooking and laundry services and emptying Dad’s wallet of folding notes.

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