Mark Field MP has already warned about the consequences of banning bonuses for those bank employees who are expected to lead the sector back to health. Lord Forsyth uses an article in today’s Telegraph to warn of other dangers, including the worry that Labour might use its nationalisation of many of our banks for its own political purposes:
"The Government says it has no wish to interfere in the way they are run. If the banks are to be returned to health – and to private ownership – then there must be no political interference. Yet the Government is putting its representatives on bank boards, demanding that banks maintain 2007 levels of lending to homeowners and small businesses, putting caps on directors’ pay and hinting that it will intervene to halt repossessions. That’s already quite a lot of interference to be getting on with. With Labour behind in the polls and an election coming up, can we be sure ministers will not be tempted to meddle a lot more? What safeguards will Labour offer to ensure it does not use the nationalised banks for its own ends?"
It’s a timely warning. Michael Forsyth worries that the devil is in the detail of the bank recapitalisation programme but (as Greg Hands MP has noted) Parliament still hasn’t had proper opportunity to debate the terms of the Brown-Darling plan.