Frank Field MP
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Running for cover

I hope members of the cabinet’s economic war council were hard at work long before I dictated this blog. The second round of bank rescue measures announced on Monday were pretty thin gruel. True, tax-payers’ potential liabilities were massively escalated, but the Government could not explain much of the details of how the scheme will work in freeing up credit.

Even without the details it was pretty clear the wrong decision had again been taken. Insuring against toxic bonds is a very different operation from trying to bring them all together in a bad bank, as it is so politely called. 
It was in mid-December that MPs on both sides of the chamber were calling for the establishment of a bad bank and for the details to be worked out in double quick time.

That must be today’s job for the economic war cabinet, gathering amidst another set of horrendous economic figures yesterday. The pound has fallen this week by 4.5% against the Euro, 5.8% against the Yen and 6.1% against the Dollar – a fall of 34% since November 2007. We don’t hear much now, thankfully, from those cheerful souls boasting falling Sterling will boost exports.

National debt is on line to rise from a little over 500 billion pounds to 800 billion by the beginning of the next Parliament. That figure could simply double if the guarantees the Government has made with tax-payer’s money arrive as bills and the loans against assets turn out to be less than the bargain us tax payers hope for.

So two dread announcements are now pending. The next unemployment figures, out today, will erase the last stretch of credibility attached to the Government’s roadmap to recovery contained in the pre-budget report.

At the same time we can expect Standard and Poor will give its judgement on the credit worthiness of the British Government. When that is announced, not only will the economic war cabinet need to hold onto its hard hats, we too should don ours, as the fall out of economic debris will greet us at every turn.

Mega crises sort the men out from the political boys. Michael Oakshot in his famous lecture on political education drew distinction between practical and technical knowledge. He talks of how “the boys might acquire the technical knowledge, but only the men would combine this with practical knowledge of affairs”. Over the past week I couldn’t but recall Oakshot’s famous words. The economic crisis is just beginning. Maybe a few more people now are accepting as I did at the beginning that it would be surprising if the recession/slump becomes as severe as I fear that our political institutions will remain intact. I suggested there might have to be a National Government. Three members of that National Government are beginning to identify themselves. Vince Cable, obviously. Peter Mandelson, who is thriving in current circumstances and must be kicking himself at not having a seat in the Commons. And the return of Kenneth Clarke, who has been through this twice before will quickly emerge in the views of politicians (he’s already there with voters) as one of those who might form this new Government.
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There is one obvious name missing from the list,yourself of course Frank !!
Comment by Anonymous on 15 Jul 2011

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