When Digby Jones was a trade minister, it was never quite clear exactly how much influence he had over Gordon Brown. Now that Jones has left the government, Brown seems to have delivered a crushing answer – not much.
At least, that's one way of interpreting the interview Brown gave to GMTV this morning, which sounds like a direct riposte to what Jones was saying yesterday when he was commenting on the banking bail-out.
Jones went on Sky to say that he hoped that there would not be a backlash against the City. According to the version on PoliticsHome, he said:
The £250bn … I hope means the banks will start lending, but then when you get the leader of the opposition using words like "there will be no bonuses" and even the prime minister using the word "punish" in his speech, the problem with that sort of word is the bank thinks if all I'm going to do is be judged when a risk goes wrong and not praised when a risk goes right, why am I going to take the risk at all.
But on GMTV this morning Brown said explicitly that "where there is excessive and irresponsible risk-taking, that has got to be punished". And just in case anyone didn't get the message, Downing Street has put "Irresponsible bankers should be punished" as its top story on the home page of its website.
In other words: "Digby – get stuffed".
I was curious when I read the Jones quote because I didn't actually remember Brown talking about bankers being punished on Wednesday. During his press conference Brown was much more vague. He said:
Where there is irresponsible or excessive risk-taking that puts not only a bank at risk but puts the system at risk, then we have to take action.
Brown only got round to using the word "punish" during PMQs, in response to a question from Sir Gerald Kaufman, when he said:
The conditions we will lay down for support to banks in this country include executive performance and the way in which it is remunerated, and we will build on the Financial Services Authority's work to ensure that excessive risk-taking is not rewarded but punished.
As this suggests, anyone who thinks that Brown envisages recalcitrant bankers being marched through the City while they get pelted with tomatoes by angry taxpayers is in for a disappointment.
The FSA review of bonuses is expected to result in banks that encourage risk-taking through their remuneration policies being forced to hold more capital in reserve. Brown might call that "punishment", but to the rest of us it just sounds like regulation.
Still, it sounds good. And Digby will be furious …
