Seeing Fred the Shred’s house being trashed in Edinburgh gives a glimpse of the nastier elements of the hang-a-banker mood out there – not just in Britain but internationally. Here is a remarkable opportunity for the Conservatives. World over, there are votes to be gained in threatening to tax or regulate the bejesus out of all financiers. Left-leaning governments (such as the Obama administration) find it difficult to avoid this temptation. There has been something of a rift in the White House over this, as Obama’s economic advisers know it makes makes very bad economic sense: in this globalised world, bankers can go anywhere they like (Barclays, for example, recently said it intends to double its staff in Tokyo).
If Cameron were to declare himself the champion of the free market, and set his face against the type of vindictive and pointless extra regulation in Wall St and Frankfurt, then he could attract some world class talent and make the City grow again. I make a full case in the Daily Telegraph tomorrow.
Now, is Cameron up to it? It would mean going against the prevailing winds – but this is no bad thing if those winds end up putting in Sir Fred Goodwin’s windows. At the last Tory conference, Cameron did precisely this – declaring himself a champion of the free market and being one of about a dozen people, at most, who were being so. This speech should be his template – not just in office, but in opposition too. Defending capitalism means being harsh with those who break the rules, so Cameron’s call for prosecutions in the City are in no way inimical to all this.
My final point: can you name any industry where Britain has a larger comparative advantage than finance? We must turn to finance again, hoping that the City will catch the wind of global finance when it eventually picks up. Learning to love bankers may be politically difficult for Cameron, but it is our best hope for a fast recovery.
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