by James Watkins

When it comes to the banks, Labour often seems to tie itself in knots. Without the square mile, the finances of the country are seen to be on shaky ground. At the same time, governments around the world which took it easy on the bankers contributed to the financial morass we are in now.

For many in Labour, there seems to be no centre-left vision or school of thought other than to accept the model of banking we have now – while maybe taking another look at regulation. But as recent events demonstrate, even this seemingly pragmatic approach is a risk too far and is one which led Gordon Brown to call for “markets with morals”.

As for the government, with Vince Cable seemingly out of the picture in pushing for fairer bank terms to small businesses, all we now have left is a threadbare deal with the banks from chancellor George Osborne. This has the non-binding target of £190 billion for lending being a gross amount, not net. So it is very possible that, as businesses repay their loans and others have credit withdrawn, the gross target is met, but net lending declines. (more…)