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PMQs verdict: I felt embarrassed for the Prime Minister

July 4, 2012 1:15 pm

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Cameron must have thought things were finally starting to go his way. This morning’s papers had begun to focus – unsurprisingly – on Labour’s role in the LIBOR scandal. He’d managed to ignore Miliband’s calls for an independent inquiry for days. The atmosphere at the outset of PMQs was almost funereal. And Miliband adopted the tone of a funeral director – although he probably hopes that the funeral to come was not for anyone he knows or likes…

To describe the mood as sombre would be an understatement. Ed Balls looked like a man whose mind was elsewhere, his usually aggressive PMQs demeanour was gone. He was silent. Tired looking. Distracted.

And yet somehow, Cameron conspired to turn this would be promising scenario into a thorough defeat. He rambled through the opening few answers just as surely as Miliband rambled through his questions. Both were pointed but “statesmanlike”. No alarms. No surprises.

Everyone was waiting for the sucker punch from the PM. A damning condemnation of Labour’s regulatory failures, an accusation over the conduct of Balls, Vadera or some other former Treasury minister over LIBOR, an old quote – there had to be something, right? He’s had a week to prepare for this…

And yet the sucker punch never came. At least not from the PM. Miliband rose to his feet. Solemnity temporarily receeded. A smile flickered across his lips. Did the aprime Minister not say that under Labour there had been too much regulation?

Cameron rose swiftly to his feet. His body was at the despatch box but his mind was rooted to and reeling on the government benches. He was rendered temporarily mute.

He sat down again to the jeers of Labour MPs.

On arising a second time he delivered an appalling pre-cooked line – the Higgs Boson has been discovered but Labour has not discovered shame.

Groans and jeers all round.

The Prime Minister has not discovered contrition either. Nor comic timing. The only person to smile was sat opposite the PM. A brief smile crawled its way up the face of the shadow chancellor. A dash of colour returned to his cheeks.

The solemnity had moved from one side of the house to the other. And I felt the strangest emotion rise up in me – I felt embarrassed for the Prime Minister. It was not a welcome emotion – but I sense it’s one I may become more familiar with in the months ahead….

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  • HerbertProperSenior

    I have maintained for many months now,that David Cameron is the classic example of  a “one term” Prime Minister.

    • John Dore

      Insert ‘sh1t’ between a and one.

      • Just_Another_Voter

         Commonly known as a ‘Brown’

    • tonyjcurran

      Hopefully he won’t even last the term.

      • aracataca

        No chance. But yes one term looks likely.

    • aracataca

      Interesting point but what is a classic example? -You mean a Ted Heath?

  • Dave Postles

    Cameron and Osborne are blustering.  Vickers has already accused them of watering down his proposals.  The timetable for the implementation is 2019.  The proposal is to ring-fence not separate. The proposal is to allow derivatives to SMEs – which have already been proven to have been mis-sold.  There can be no real way of unilaterally changing the arrangements for marking Libor without equivalent changes to offered rates in the several other financial centres.  A bill could be proposed now with future additions.  The transformation of the culture of the banks is a long-term mission, not something which can be introduced overnight.  An independent commission would involve barristers with forensic questioning.  What the government suggestion promotes is a investigation of the most despised ‘profession’ by the most disrespected ‘profession’ – with all due respect to Andrew Tyrie – a fudge-led enquiry.

    • Dave Postles

       ’an’ not ‘a’

    • treborc

      I wonder has Bob Diamond been offered another job, because boy does this look a damp squib, so far.

      • Dave Postles

         Purple Bookie is offering odds of 3/1 on that it is with Goldman Sachs.

        • treborc

          No surprise if it happens.

    • Mike Murray

      Absolutely agree that it will be a fudge-led inquiry. I am watching Diamond being grilled now by the select committee. Their inept questioning convinces  me more than anything  that MPs do not possess the knowledge or the forensic skills of cross examination necessary for an inquiry into the LIBOR scandal. A judicial inquiry is essential

      • Peter Barnard

        Agreed, Mike M.

        If this afternoon’s session is a specimen of what a Parliamentary inquiry will look like, the process will be embarrassing, especially since there is a possibility that now and again it may be shown world-wide. The comparison with the Robert Jay style of questioning is the difference between chalk and cheese.

        Also, the prospect that failed Chancellor Lord Lawson may be on the committee is quite unsettling.

        Personally speaking, after this afternoon’s performance, I would certainly buy a used car from Mr Diamond. I would also be quite happy to buy him a drink – he was an absolute gentlemen in the face of some – almost – insulting questioning from some MPs on the committee.

        Oh, and for the record, Mr Diamond said that he absolutely did not gain the impression that Paul Tucker was suggesting that Barclays fiddle its LIBOR submittals.

        Frothing-at-the-mouth Conservatives with Ed Balls in their sights will have to wait for another day …

        • treborc

           Of course you have to ask the question is this arranged because we were told Diamond would be brutal, had the Tories or labour spoken to him about future jobs, because this was lacking anything it had nothing it was like well, I do not know what, children playing have more brutality

          • Peter Barnard

            “We were told Diamond would be brutal …”

            Journalists have to find (and invent) stories, Treborc … as it happened, the gentleman Mr Diamond ran rings around the aggressive MPs who had no idea of interviewing techniques.

            Just as a matter of interest, I wonder how many of the MPs investigating in the “interest of public probity” were actually squeaky-clean when the expenses business broke in 2009?

          • treborc

            It was very easy for Diamond

        • JoeDM

          “… Bob Diamond claimed there had been a series of private conversations with senior Government figures, thought to include Baroness Vadera, during the autumn of 2008.”

          See: http://www.telegraph.co.uk/news/politics/9376923/Bob-Diamond-Labour-ministers-were-warned-about-Libor-fixing.html

          • Peter Barnard

            So? They were private conversations and neither you nor me know what was in the conversations.

            And, who was doing the “thinking” about the inclusion of Baroness Vadera? Journalistic weasel words.

            But then, the world is full of people who will believe what they want to believe in newspapers.

          • Dave Postles

            Pure speculation because it is clarified further down:

            “I would only be speculating and it’s not appropriate to do that,” he said.
            “Paul [Tucker] didn’t mention who he was referring to. I don’t know, senior
            people. Shriti [Vadera] was very involved in recapitalisation of banks in
            UK. John Varley [the then Barclays chief executive] was doing most
            communication with Shriti but she asked to see me also. I would see her and
            Paul Myners [the City minister] from time to time. There were conversations
            with them. It was being driven by John.”

            “Asked again, Mr Diamond said that Mr Varley had a follow-up conversation with
            “Government” following the discussion with Mr Tucker.”

            What substance is there in that?  You really should stop this partial and selective extraction – and the political editor of The Telegraph should really know better.

          • Dave Postles

             Try the antidote – it might assist your recovery:

            http://www.guardian.co.uk/politics/2012/jul/04/bob-diamond-smoking-gun-tories

          • Brumanuensis

            Aside from the fact that Diamond admitted that the bank planned Libor manipulation a year before the call with Paul Tucker, it’s nonsense to suggest that the contact was made with the intent of manipulating Libor, as Daniel Knowles explained:

            http://blogs.telegraph.co.uk/news/danielknowles/100169117/bob-diamond-loves-barclays-and-its-culture-and-that-culture-was-what-was-wrong-not-the-failings-of-libor/

            “The now infamous suggestion of “officials” that Barclays’ Libor was too high wasn’t a suggestion by Labour ministers or civil servants that it should be lowered. Rather it was a fear that Barclays was in trouble, being passed on subtly by Paul Tucker. And even afterwards, though Libor fell, Barclay’s low-balling had no part in that, because its figure was still in the high end of the submissions. Under the system, the extreme entries are knocked out of the general figure”.

  • Billsilver

    Steady on Mark – your tears will need wiping up soon.

  • JoeDM

    Seems to be forgotten on LL that Labour were in charge when all of this ‘light touch’ regulation was causing these financial problems !!!

    • http://twitter.com/mistyblulabour dave stone

      You’re wrong there Joe. It was New Labour.

      • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

        It seems to have passed some people by that Ed has – right from the start – made it clear that he thinks New Labour made some mistakes and it is also clear it is in the field of acceptance of predatory capitalism and the workings of the City

        • treborc

           Yes I agree he has, but of course he has to be elected, no second chance. But to be honest New labour is not that dead within Labour, you have a group which represents it as well.

          And what ever the Tories called for means little, labour was the party in Government they had the responsibility.

          Lets hope Ed can prove to the people he is real, and having Blair around is not going to do it

    • John Ruddy

      Seems to be forgotten by Tory Trolls that the Tories said Labour’s ‘light touch’ regulation was being too tough, and needed to be removed.

      • Peter Barnard

        And, of course, John R, Labour’s “light-touch” regulation was responsible for Bear Stearns, Lehman Bros, AIG and Merrill Lynch all going belly-up in the United States and UBS and Fortis bail-outs in Europe.

      • Peter Barnard

        And, of course, John R, Labour’s “light-touch” regulation was responsible for Bear Stearns, Lehman Bros, AIG and Merrill Lynch all going belly-up in the United States and UBS and Fortis bail-outs in Europe.

        • Dave Postles

           Add Commerzbank?

          • Peter Barnard

            Commerzbank as well, DP ; I was remembering “off the top of my head” and I’m afraid that my grey cells aren’t as retentive as yours.

            Wasn’t there also another of the mega-banks in the US – Chuck “keep on dancing” Prince’s outfit?

          • Dave Postles

             Bank of America is the biggest basket case over there, I believe – and that one might yet explode catastrophically. 

    • James

      I don’t remember hearing the Conservatives criticising “light touch” more the opposite as I remember it. There were many calls from the Tories for Labour to deregulate even further and “get off the backs” of bankers and entrepreneurs regulation-wise to enable them to “do their job” and “create wealth”… which they did… splendidly… at least for themselves.

  • Dave Postles

    It will be interesting to hear Paul Tucker’s comments before the TSC.  Did he intend that if Barclays, like the other banks being rescued, accepted funding from the government/BoE, then Barclays offered rate would fall?  Was it a veiled attempt to get Barclays to do something positive about its precarious position by accepting government support?  Barclays was secretive about its short-term loans from the Fed and about the process of its negotiations with Middle-Eastern funders.  The concern might well have been to persuade Barclays to accept some government interim support for fear that Barclays was about to go belly up.

    • Peter Barnard

      Dave P : I think it is entirely plausible that some in HM Treasury (either officials or ministers, or both) were concerned that the Barclays’ LIBOR rates were indicating “trouble at t’mill” and, if that were the case, it would be entirely appropriate and legitimate to ask the BoE (Paul Tucker, it seems) if they could find out what the possible cause was because at that time – post RBS, HBoS – the last thing that the British financial system wanted was another bank – especially as large as Barclays – on the rocks.

      If I remember correctly, Mr Tucker himself had previously worked “in the markets” and was regarded as someone who was very capable re the financial markets.

      Such an enquiry is a long, long way from any suggestion that Barclays should mis-report its LIBOR submissions downwards in an attempt to restore confidence. Indeed, Mr Diamond said this afternoon that he definitely did not understand Mr Tucker’s telephone call as a suggestion (request, call it what you will) that Barclays should fiddle its LIBOR submittals.

      The FSA (and DoJ) have also gone on record that “no instruction for Barclays to lower its LIBOR submissions was given during this telephone conversation (FSA) and, from the US DoJ,  ”that was not the understanding of the senior Barclays individual (Mr Diamond) who had the call with the Bank of England official (Mr Tucker).”

  • jaime taurosangastre candelas

    Is a “Judge led” enquiry the correct way to go?  Many Judges seem to be completely divorced from reality as it is, and this world of the City and deals and what is and what is not right under the law, and also under morals is very difficult for a non-expert to discover.  Perhaps the best answer is to find someone who is a City expert and then give him or her the powers of a Judge.

    • postageincluded

      I suppose you would have preferred it if the Press Council had run the phone-hacking enquiry,  and the British Association of Social Workers had run the enquiry into Baby P.  Judges may be old men (and occasionally women) in antique fancy dress but I’d say you’re more divorced from reality.

  • Amber Star

    Labour should keep up the pressure for a Judge-led inquiry. 55% support it compared to 30% for a parliamentary inquiry – You Gov poll, July 3rd. So that’s before the disappointing TSC chat with Bobby Dazzler.

    Robert Peston (BBC, influential commentator) was saying we learned nothing new from the TSC.

  • derek

    Was it a mistake to give the BoE control of interests rates? and did such a policy lead to the banks having a field day with setting irregular interests rates?

    • John Dore

      Oh dear.

      • derek

        Oh dear what? they’ve been fixing interest rates for the last 4 years so those with mortgages didn’t suffer from several raised rated.It seems as though the middle ground argument is tainted in fixing while the lower end get hammered. How on earth can you justify having a family of 4 living on say £30 thousand per year paying the say council tax rate as a couple living in an identical home who earn £60 thousand a year.We all know that thee less you earn the more likely the higher rate of interests you’ll pay on a loan, It’s no different in the banking sector? the big shark will always eat the little fish.

        • John Dore

          I guess finance is not your strong suit, your mixing all sorts of unlinked points.

          The Bank (BoE) control base rates, this is not the same as Libor which is the interbank rate. The BoE sets base rates under strict criteria. Bank base rate has nothing to do with Libor which is set by the city banks and not the BoE. The rate crisis pertains to Libor and has nothing to do with the decision to move base rate decisions to the BoE.

           Your council tax example is weak in that its only a piece of the overall pie. The person earning 60k p/a might say to you why do I pay 31% in tax when the guy on 30k pays 24%. Or in real hard cash 18.5k v 7.1k…. and BTW I believe in progressive tax.

          You don’t pay lower interest because you earn more, there is no sense in that. You pay more interest in there is a lower chance of paying the money back. Note Some smaller loans attract a higher rate of interest to cover the admin.

          • derek

            Are you actually saying the “libor” the city banking fixed rates without the BoE  knowledge? as far as I’m aware the 2008 banking crash saw some banks being brought into nationalised control surely “Libor” must have been involved in that process and surely the BoE did some homework of the cities financing mechanisms? 

          • John Dore

            Genius.

  • https://mikestallard.virtualgallery.com/ Mike Stallard

    OK let us put the blame squarely where it deserves to rest, shall we.
    1. Where were the FSA? What are they actually there for in the first place?

    2. The Treasury put itself firmly in control of the Banking system under Mr Gordon Brown as you may remember when he “freed the Bank”. They are still there. Sometimes they are Labour controlled, sometimes Conservative/LibDem controlled.

    3. The Governor of the Bank of England, stripped of his powers, was forced to go underground. Which, we understand, he did.

    4. The Bankers used, before the Big Bang, to be respectable men in suits who didn’t take risks with other people’s money and who ran a tidy little closed shop mostly honestly.

    This is totally above personal attacks on individual politicians. As with the Murdoch scandal, politicians of all stripes were all in it together.

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