Saturday, October 18, 2008

The Bank Rescue

The Times has a fascinating behind-the-scenes account of how the bank rescue was put together. It's marred only by the title they give the piece - "How Gordon Brown took the credit for his sidekick’s rescue plan".

Certain sectors of the press and all Tories have been criticising the Bank rescue, not on the details of the plan (it's a very good plan, so hard to pick at it), but on the basis that Gordon Brown shouldn't get any credit, because he didn't come up with the plan personally. It speaks to an bizarre view of how government works.

In this blog I've always referred to the plan as the Darling plan, as it is clear to me (and to anyone who has given thought to it), that something that comprehensive could only have come from the Treasury. Number 10 doesn't have the resources to do it.

The job of the Prime Minister/leader is not to think of everything himself, but to task others to come up with solutions - and then to decide and choose correctly which solution to pick from the vast array presented to him. There is always a range of solutions presented. Even in the lead up to the Iraq war, the MoD will have presented several plans, one of which would have included the benefits of not deploying at all.

Leaders vary in how much of a steer they give their cabinets. Eisenhower used to insist that his cabinet presented him with a summary no more than a page long. He then read the submissions, decided, and went off to play golf in the afternoon. Roosevelt took a slightly different tack - he always set up two separate streams of ideas flowing to him, one official and one unofficial, and let both know in advance that the other existed. In his opinion, that was the only way to catch out people out when they tried to withhold information, or use their proximity to power to steer him by suppressing ideas they personally didn't like but which were beneficial to the nation. He felt that his decision-making benefited from as broad a range of information and ideas being presented to him as possible. Thatcher by contrast, didn't trust anyone's ideas but her own. She had mirror departments in No 10, which made the actual decisions, sidelining the people in the real departments (to the frustration of people like Nigel Lawson).

The Treasury under Labour has really blossomed. It's gone from being a department that under the Tories was convinced it could get nothing right, into a big powerful department that attracts the best civil servants and is confident of it's abilities. It should surprise no one that they came up with such a good plan. It should surprise no one that the current incumbent of No 10 trusts the Treasury.

At the end of the day the Prime Minister looked at the options on the table and decided. With such big sums at stake, he was the one who had to sign things off. It's his plan because the responsibility for it lies with him. If it works, it's because he chose it. If it doesn't work, it's down to him for choosing it. That's what being prime minister is about.

But clearly the Tories and parts of the press don't share this view of what the job of prime minister is about at all. I believe their strange ideas stem directly from the top of the Conservative party, where Cameron and Osborne operate a tight cabal and believe that if they haven't thought of an idea themselves, it's not allowed the light of day. Which is a juvenile or novice idea of how large organisations are run. And it would create no end of problems if they were ever to get into power. Another reason to keep them out.


Hughes Views said...

"The Treasury under Labour ... attracts the best civil servants" - perhaps that's why the Tories and some of their "traditionalist" supports don't like it. There's always been a suspicion of clever people amongst some old-fashioned English people.

Anonymous said...

The banks bailout is neither Brown or Darlings plan it's a copy of the 1992 Swedish bank bailout plan.
Like most New Labour policies ,no original thinking just policies lifted from other people / parties.

New Labour's immigration policy or lack of it being another recent example,funny to see them now embracing the Tory policy,Mr Woolas telling us that it's been too easy to get into this country,has he been asleep for the past 10 years?

snowflake5 said...

broncodelsey - the Swedes may have recapitalised banks - but they certainly didn't provide the guarantee of interbank lending that was a crucial part of the Brown-Darling plan.

And it's noteworthy, that other governments did not come up with any viable solution till we presented ours. Nor did Tories.

The Tory plan was to lets banks go bust Lehman brothers style - and they U-turned in a hurry to adopt the Labour plan when it became clear Osborne was talking dangerous crap.

I'm also intrigued at your idea of how a government should work - am I to understand that a Cameron government will adopt no ideas that Cameron has not personally thought of himself? In that case the Tories will be in for a struggle - he claimed he was "a man with a plan" three weeks ago, but it appears there is nothing in his head but waffle. Sort of "I have a cunning plan, which I haven't yet thought of yet".

Anonymous said...

The Swedes didn't need to guarantee interbank lending as all their major banks were nationalised as part of their bailout.

Still no joy for Brown & co in the polls but only 18 months left of this New Labour horror show.

Tom Freeman said...

I say this tongue partly in cheek: when you consider the looming firestorm that Darling had the rotten luck to inherit and the scale of the achievement (assuming that the rescue plan works), isn't there a case for rating him one of the best chancellors we've ever had?