Thursday, March 03, 2016

Has Corbyn wised up - or got still more barmy?

Jeremy Corbyn made a speech to the British Chambers of Commerce today - it did not get the amount of publicity I would have expected, but there is an advance report here and a Sky news report here  - which accuses the New Labour government's banking policy of a significant share in the blame for the financial crash.

I would have thought that was big news.

Refusing to accept that the previous Labour government got anything wrong so they could apologise, move on, and point to what they were going to do differently in the future now was one of Ed Miliband's worst mistakes.

So would Corbyn say anything more sensible?

HIs explanation of the crash of 2007-8 was

"In 2007 and 2008... the banking sector nearly drove the entire economy to the point of collapse.

"The New Labour approach was to opt for 'light touch regulation' of finance - and then sit back and collect the tax revenues.

"But you cannot base a decent social policy on an unsustainable economic policy.

"And we cannot outsource economic policy to the City of London."

Well, he's right that the regulatory regime put in place by Gordon Brown failed.

But is the problem that it was a "light touch" regulatory system, or that it didn't do what it was supposed to do, e.g. ensure sound money?

To Corbyn

"The banking sector has to be reformed. Finance must support the economy, not be an end in itself … and certainly not an extractive industry that looks at consumers, entrepreneurs and small businesses as a cash cow."

In other words, he's continuing the Miliband policy of hunting for business scapegoats, just looking at a slightly different group of scapegoats.

Not, then, a huge step forward.

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