Charlotte Hogg is an economist. She was made deputy governor, markets and banking, of the Bank of England, you know, the one that actually belongs to the UK, not England, the one that said they were able to make sharing the pound a reality. Anyhow, Hogg forgot to declare an awkward conflict of interest. Her brother, Quintin Hogg, is a director of group strategy at Barclays, which the Bank of England regulates.
Hogging the limelight
Hogg has, I understand, apologised, but her judgement is tarnished. Hogg claimed to the Treasury Committee that she had done the right thing back in 2013, when she joined that august body of robber barons. This was an ‘untruth’. She did not she declare an interest during yearly compliance checks. Funnily enough she forgot to declare it when helping to write the bank’s code of conduct – stop guffawing at the back – and was absent-minded again when she applied for her new job.
Hogg has friends in high places. Her mother is Sarah Hogg, journalist, now ensconced in the House of Lords at £300 a day back pocket money. Her father, the third Viscount Hailsham, served in John Major’s government. His career as an MP ended when he was making us pay for his home improvements by charging his moat cleaning to the state.
Other bank news
Other news of other banks went by barely noticed: RBS will retain massive debts until the Earth is hit by a meteor, Lloyds is setting aside more billions to pay back customers it’s cheated, and HSBC, a bank hoping we’ve all forgotten it’s money laundering services, threatens to take itself abroad when the UK leaves Europe.
The good old days
Our local branches are closing down everywhere. The few remaining open twice a week when we’re not looking, and are selling the furniture fast as they can. Find a Tesco wall teller or be damned. I refuse to use online banking. If someone’s got my money I want to see their face, I want them to know I know they have it.
Before the 1970s, banks were banks. They were places you could leave your hard-earned money and know it would be their next month, safe. They did what banks were supposed to do in a state capitalist economy: they took unused funds from your bank account and, for example, transferred them to some potentially useful purpose like helping you buy a home, or sending your son or daughter to university, or technical college. Try securing a mortgage today – deposits start at 40% of the property’s value.
An ominous rumble
Across the pond, the USA’s banking supremo Alan Greenspan decided deregulation was the way we could all get richer. He told banks to throw off restrictions on how they handled ours savings and our pensions, and go forth and multiply. This they did, by using our savings to treble their salaries and bonuses.
Until then banks were solid, reliable places that helped our economy grow. That changed dramatically in the late 1970s. There had been no financial crises since America’s Great Depression, and no disaster in the United Kingdom since the USA loaned us billions in the 1950s to stave off bankruptcy and restart prosperity days after the war. The 1950s and 1960s saw a period of enormous growth, maybe in economic history.
Egalitarian was a fine term
Growth in the UK was egalitarian. As economists described it: the lowest quintile did about as well as the highest quintile. Lots of people moved up the social ladder to a better lifestyle. Sociologists called it “working class to middle class”
All sorts of political groups emerged for all sorts of political causes. Growing wealth civilised the country in lots of ways that are permanent. But American neo-conservatives were planning a new doctrine – ‘greed is good’. They saw it partly as a way of taming nations whose politics they disliked, or resources they coveted. It soon became a way of keeping their own population docile.
A good book on the history of those decades will explain detail, but in essence neo-liberalism, as it was miss-titled, began to gain acceptance, first under Thatcher’s regime and then Blair’s: de-industrialization, the off-shoring of production and the shift to financial institutions, which grew enormously.
To add to that expansion of moving wealth and ownership to the top of society we got the high-tech economy: computers, the Internet, and the IT Revolution burgeoning in the state sector. It was a vicious circle. It led to the concentration of wealth increasingly in the hands of the financial sector.
Of Politics and Money
Concentration of wealth yields concentration of political power, and concentration of political power gives rise to legislation that increases and accelerates the cycle. The legislation, essentially bipartisan, drives new fiscal policies and tax changes, as well as the rules of corporate governance and deregulation.
Alongside this began a sharp rise in the costs of elections, which drove the political parties even deeper into the pockets of the corporate sector.
We see it today in Westminster’s cruel and callous fiscal policies: the withdrawal of the welfare state, the reduction in pensions, a diminution of workers rights, people working longer hours for less pay, pensions delayed till the elderly are in their seventies, house prices moved way out of the pockets of most ordinary people. These changes are much greater in the UK than countries such as Japan, or some countries in Europe.
Remarkably, with billions in Scotland’s North Sea oil to play with, the British government has made the UK a poorer place – an accomplishment surely on par with Mussolini’s Italy. The British monetary system has been driven deeper into the pockets of the corporate sector and increasingly the financial sector.
Companies moved their goods up-market to cater exclusively for the mobile rich, the rest of us left to get by as best we can. The masses are people who live a precarious existence, the just getting by people (JGB) – the ‘precariat’.
A substantial reduction in people’s living standards diminishes hope for a better future. Hope lost is the same as despair.
[Hogg resigned three days after publication of this essay. GB]
Waiting to collect a relative from Edinburgh’s Waverley station, parked late at night under the flood light illuminating the Bank of Scotland’s old headquarters on the Mound, I suddenly realise it’s no longer a bank It is now a museum.