15 Sep 2010

King tells TUC: ‘We let it slip’

The government ministers facing the terrifying job of selling their cuts to the country should get a tape of Mervyn King’s foray in to the lions’ den today.

There was a mini-walkout, a stand up protest, and a few dozen union delegates holding ‘no to ConDem cuts‘ signs. But its worth noting that the dissent was far less than I saw meted out to Tony Blair over his part privatisation plans a few years back.

The Governor came bearing two rhetorical gifts. A spot of contrition, and some banker-bashing.

In saying “we let it slip”, he pinned blame for the crisis on bankers and policymakers, and, by extension, the Labour government. It is the closest to a mea culpa I have ever heard this proud self-confident academic. 

Even the word ‘bank’ seemed to send some union delegates into an eye-bulging tizzy. It is a shame, because on bank reform they have been surprised to hear just how much common cause Mervyn King has with the band of union brothers.

Yes, he was playing to a lightly hostile gallery at the TUC in Manchester. However at one point he vaguely seemed to incite further bank-bashing by saying that he understood the strength of feeling on bankers bonuses, and he was surprised that it had not been expressed more deeply.

Remember this. When things start to get testy, and middle Britain realises its libraries and care homes are being shut, then expect the Coalition to move quite quickly to blaming bankers again. In Ireland, at the very moment that austerity ceased to be theoretical and actually started to bite, effigies of Ireland’s bankers began to be burnt.

I don’t think that Mervyn King changed many minds here at the TUC.  He also hinted at a long term strategy of low interest rates to accomodate the economic of spending cuts.