Darling pulls a fast one

Alistair Darling has just forced George Osborne to the dispatch box to explain the regulatory measures that he will announce at Mansion House later today. Osborne confirms that some powers will return to the Bank of England and that an independent commission, under Sir John Vickers, will take into account competing views on capital, leverage and liquidity requirements. Retail and investment banking will be split under the new arrangements. This is effectively the end of the tri-partite system.

Alistair Darling defends the tri-partite system in its entirety, arguing that no one will understand from ‘this dog’s breakfast’ who now regulates the banks – talk about undermining confidence, which the opposition was condemning less than half an hour ago. Osborne responds that the government is interested in learning from mistakes and that the opposition is hell-bent on repeating them; he adds that an international debate on regulation is underway and that the Vickers commission is the first part of its resolution. Osborne believes in process, not panic. A further statement will follow tomorrow.

Osborne handled this surprise extremely well. His recent announcements, when he has made it to the House at all, have been slightly hectoring. This was an assured performance, not even Dennis Skinner could shake him.