Today’s the start of the party’s spring conference, and to mark it Nick Clegg has given an interview to The Times in which he makes this eye-catching proposal:
Directors who were running the banks Northern Rock, HBOS, Royal Bank of Scotland and Bradford & Bingley when they were rescued by the taxpayer should be disqualified from sitting on company boards, Nick Clegg said yesterday.
On the eve of the Liberal Democrats’ conference in Harrogate, Mr Clegg told The Times that these directors had shown that they were not fit to oversee companies.
His proposal would affect leading City figures such as Lord Stevenson of Coddenham, the former chairman of HBOS, and Peter Sutherland, a non-executive director of RBS and chairman of BP.
Much of the power to do this already exists. The Financial Services Authority can remove licences to operate in financial services, and Lord Mandelson, the Business Secretary, can disqualify company directors.
“I don’t say this out of any sense of being vindictive or wanting to put them in the stocks,” Mr Clegg said. “It is a sensible thing for the regulator or Lord Mandelson to say, ‘You guys have shown you are not fit’.
You can read a fuller report here.
Update: even James Forsyth of the right-wing Spectator’s Coffee House blog has praised Nick for his statement:
This strikes me as very clever politics. There is a phenomenal amount of anger, much of it justified, at the fallen masters of the universe who seem to have paid no price for their actions. Politicians of all parties have been trying to tap into this but few of their ideas have cut through. Clegg’s proposal is eye-catching enough to do so. It is also that rare combination, just and populist.
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5 Comments
So – is there a point of principle here? Is the party going to propose that any director of a company that fails should be disqualified from being a director?
Or is this just another episode of knee-jerk populism – specific to bankers just because they are unpopular at the moment?
Of course, the visible elation of LDV staff every time the Spectator agrees with something the Lib Dems have said is yet another sign of how much things have changed. In the old days, the slightest sign of approval from that quarter would have been a cause for serious concern.
But in the wildly unlikely event of this being a principled policy rather than knee-jerk populism, I have to wonder whether there’s any prospect of its being applied to politicians as well as company directors. If the Lib Dems lose half their seats at the next election, can we look forward to Nick Clegg being banned from political office for life?
No. The Lib Dems aren’t the trustees of people’s life savings. Banks are. Same for small businesses. Banks have a responsibility to the wider economy which political parties and other types of business don’t have.
Sorry, ‘same for small businesses’ meant that small businesses also *aren’t* responsible for people’s life savings, not that they are. Sloppy wording.
“No. The Lib Dems aren’t the trustees of people’s life savings. Banks are.”
That is an argument – not totally without merit that to become director of a Bank you should meet a higher standard than to be a director of another company.
I’m instincitvely edgy when people start talking about bans of people who have received widespread public condemnation as it often gets very close to pandering to populism.
ISTR Vince giving an anedecdote about a resolution passed in Parliament after the South Sea Bubble calling for those responsible to be tied up in a sack containing poisonous snakes and thrown into the Thames.
What Nick should have said is that bank directors should face the potential threat of disqualification. Or, indeed, being tied up in a sack of snakes. But only if, on objective review of their actions by an independent panel, their culpability were to be proven.
A suitable punishment should then be chosen to fit the crime. (Snakes it is, then!)