Frank Field MP
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Taking Responsibility

At some stage the Government, I believe, will have to come back to the bad band idea. While the toxic assets have been repackaged to the nth degree the banks by now must have some idea of the extent of their vulnerability on this score. So I return to an idea I put forward in a Telegraph article dated 13th December. Before another penny of tax-payers’ money is given over to the banking system, the Prime Minister and Chancellor ought to lock Britain’s senior bankers in a room saying they are not being allowed out until they write down the size of their bank’s toxic debt and there be no takeaway Indian food until the exercise is complete.

Because the Government is not doing this, the Chancellor now cannot say the size of tax-payer liability from the measures he has announced this afternoon. Getting the bad debt parked on the side is likely to be the best way of freeing up credit. 
Two other moves would help. The “short selling ban” should be re-imposed and the FSA ought also to list the extent to which pension funds have been allowing their shares to be used in this way. What has been the net loss to those funds of allowing short sellers to devalue pension assets in this way? Pensioners have a right to know.

At the same time, the Government should make plain that it is opening up discussions with Parliament on how best to bring to account those people who are most responsible for pushing the country towards the edge of an economic precipice. So far Parliament has looked irrelevant to this fast-evolving crisis. The Government needs to act quickly to prevent an economic catastrophe and, why it might sensible to listen to what MPs have to say, the Commons does not have an executive role to play. But it could have this deliberative role in helping to bring the culprits to book and suggest how some of their ill-gotten gains might be used to offset the escalating national debt amounting from the Government’s rescue packages.

More than a page of history will be turned tomorrow. The President-Elect will become President Obama proper. Naturally British political leaders have been rushing to pick up his coat tails. But his message from yesterday is as clear as it could be. Change is coming to America because the people are going to be the agents of change. Wow, in one smart move he begins to manage any disappointment with the new President. More importantly he brings the nation together to forge that change. It is not Obama but the American people themselves who, in Tony Blair’s touching phrase, “will feel the hand of history on their shoulders”.
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