From the TUC

Bank bail-outs unpopular

27 Jan 2009, by in Economics, Politics

Today’s ICM poll for the Guardian will not make happy reading in Downing Street. While no-one should take much notice of a single poll’s figures for voting intention, it looks like there are some interesting findings in the small print, even if the raw data on which poll junkies like me feed does not appear to have been published yet. (It will no doubt appear on the ICM website in due course.)

What should worry ministers is that only 42 per cent back the bank bail-out. This contrasts with 85 per cent who back using public construction for job creation and even 63 per cent who support the VAT cut, despite being vigorously opposed by opposition parties and many commentators.

Of course 42 per cent is by no means a small proportion of the electorate – and the irritating failure to publish the full poll does not allow us yet to see how many oppose it, compared to those who don’t know. But it should still ring some modest alarm bells.

Preventing the collapse of the banking system was absolutely imperative. If banks had gone bankrupt the knock on effect in the rest of the economy would have been dreadful. We would not be in a difficult recession but a deep slump.

Everyone arguing for government support for this or that initiative now routinely says that if ministers could find money for the <insert rude adjective of choice> bankers, then they should also back their much worthier cause. This argument is not just good rhetoric as it also captures a real change in the political weather that now allows – and even expects – government to use its powers rather than leave it to the market. But even so the consequences of not bailing out the banks would be much further up the Richter scale of economic catastrophe than failing to help other sectors (though that’s not to say that should not happen.)

It seems however that the government has not got this across to most people. It underlines my earlier argument for a better political narrative about the recession from government.

Banks are understandably unpopular. They have never been the most liked institutions in the UK, but even people who do not follow Robert Peston’s every report know that they are in some way the main architects of the recession. It is not that surprising to learn that people instinctively dislike giving them public money – and indeed I suspect at least a few people will have told pollsters that they don’t support the bail-out to register this, even though they would accept it was necessary and inevitable.

What would help is a better sense of what the banking system should look like in the future even when we are through the worst of the recession. Any sense that taxpayers are supporting the banks so that they can go back to acting in the way that they used to, perhaps with a few of the rough edges taken off, will not work. Banking needs root and branch reform.

Lord Myners has begun to do this – perhaps because he moves in the financial world he is less deferential than some ministers who are still terrified of appearing anti-business.   (See Tom P’s commentary too.) But it cannot be left to him.

As Nick Palmer MP says on the Labourlist blog:

But it’s not just jobs, it’s culture too. For the first time since the Thatcher years, I think there is now an absolute majority of voters who sympathise with the basic social democratic proposition, that too much competition and too much acquisitive greed destroys the soul of our society. If we set out a coherent picture of a more cooperative, more ethical Britain – even if it means that in good times the most successful of us get a little less spectacularly rich – we will find an echo in the electorate. And if that means admitting that we’ve acquiesced a little too much in the culture of greed that we inherited from Thatcher – well, people will appreciate that too.

Politicians find self-criticism really hard. And journalists love u-turn stories. But I suspect voters rather appreciate them, especially when accompanied with convincing policies that demonstrate change.