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It’s 8-2 to UK bankers as lobbying blitz crushes coalition government’s Vince Cable

Ever since the crash of 2008 the world’s bankers, many of whom have pitched their tents in the UK, have had more verbal ordure heaped on them than any group of people since, well, the last religious martyrs in Western Europe.

But are they bothered? No, it would seem, as the UK banks’ concerted and ferocious campaign against the so-called Independent Commission on Banking, which wants to separate banks’ gambling activities from their role as guardians of voters’ deposits, seems to have paid off.

And the ICB isn’t due to deliver its final report for a few weeks yet.

This is another huge slap in the face for Lib Dem business secretary Vince Cable, who was all over the airwaves this morning saying the banks were throwing their weight around (true) and the bastards needed to be regulated (also true).

So how come the bankers (the most loathed and disliked people in the world) are going to get their own way, again?

Well our headline refers to Manchester United’s comprehensive stuffing of Arsenal on Sunday and, in the banking context, the British Banking Association’s redoubtable boss Angela Knight’s battle against Cable has been rather akin to Man U’s Sir Alex Ferguson against Arsenal’s idealistic Frenchman Arsene Wenger.

Cable has right on his side but Knight (who’s the kind of gal who would probably have defeated the Luftwaffe on her own in 1940 if only she’d been given wings) knows how and when to put the boot in.

Namely that the UK economy is too weak to allow the big banks to cut lending because they would have to incur the costs of capitalising two businesses, investment and retail banking (very arguable, it wouldn’t cost that much) and that one or two of the big banks (HSBC, Barclays, Lloyds Banklng Group and RBS) might leg it abroad if the government was mean to them.

This is complete cobblers and it wouldn’t matter very much anyway if HSBC returned to its home territory of Hong Kong or ‘Diamond’ Bob Diamond at Barclays decided to relocate to his spiritual home, Wall Street.

The UK government might even garner more tax from them if they did; they would have to keep (or sell) their UK retail operations and those should be taxed properly here.

So why is it 8-2 to the bankers, legislation being kicked into the long grass until after the next general election?

Tory boys George Osborne, chancellor, and David Cameron, prime minister, are terrified of upsetting the banks despite all their brave talk. With the UK economy grinding to a halt Ms Knight’s doom-laden forecasts of an end to bank lending (not that it’s exactly flowing at the moment anyway) give them the excuse they need to postpone anything that might upset their chums in the City.

Can Vince Cable and his Lib Dem boss deputy PM Nick Clegg extract anything from their latest humiliation?

Probably not. But if they resign they’ll be consigned to an unfortunate historical footnote, the guys who killed the Liberal Party (again).

So Cameron, Osborne, Diamond Bob and his pals will get away with it – also again.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.
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