Cameron was for a public inquiry into the banks before he was against one

Ed Balls reveals the Tories' past backing for a public inquiry.

After George Osborne's evidence-free assertion that Labour ministers were "clearly involved" in the rate-rigging scandal, Ed Balls has come out fighting. Speaking in the Commons, the shadow chancellor has just revealed that Osborne and David Cameron once supported a public inquiry into banking regulation (something they now oppose).

Here's the November 2008 Tory press release quoted by Balls:

David Cameron has repeated calls for Gordon Brown to hold a public enquiry (sic) into failures in the system of banking regulation.

Speaking at Prime Minister's Questions, David asked Mr. Brown if he agreed with Lord Myners, the Government Minister who this week agreed that a public enquiry (sic) was needed.

David warned that, with unemployment and repossessions on the rise, the public must be told how we came to be in this position and added:

"On the day the American people voted for change, people in Britain will ask how much longer do we have to put up with more of the same from a government that’s failed"

And here's what Osborne had to say on the matter:

The whole point of having a public inquiry is that it must cover the behaviour of everyone responsible: the bankers, the regulators and of course the ministers, past and present.

Because so much public money has been spent rescuing the banks, any inquiry must interview witnesses in public and one of the central witnesses must be the man who was Chancellor of the Exchequer for ten years and presided over the age of irresponsibility: Gordon Brown.

Advantage Balls.

Separately, Balls has confirmed that Labour will vote against the government's proposed parliamentary inquiry. Given that Andrew Tyrie, the Conservative chair of the Treasury select committee, has indicated that he will not chair an inquiry without cross-party support, one may not take place at all.

In 2008, David Cameron called for a public inquiry "into failures in the system of banking regulation". Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Leader: The angry middle

As a sense of victimhood extends even to the middle classes, it makes Western democracies much more difficult to govern.

Two months after the United Kingdom’s vote to leave the European Union, it remains conventional wisdom that the referendum result was largely a revolt by the so-called left behind. Yet this is not the full picture. Many of the 52 per cent who voted Leave were relatively prosperous and well educated, yet still angry and determined to deliver a shock to the political system. We should ask ourselves why the English middle class, for so long presumed to be placid and risk-averse, was prepared to gamble on Brexit.

Populism has long appealed to those excluded from political systems, or from a share in prosperity. In recent years, however, its appeal has broadened to young graduates and those on above-average incomes who also feel that they have not benefited from globalisation. The sense of middle-class victimhood has become a major strand in Western politics.

In the United States, middle-class anger has powered support for Bernie Sanders and Donald Trump. The former drew his activist base mostly from young liberals. And while Mr Trump’s success in the Republican primaries was often attributed to a working-class insurrection against “the elites”, exit poll data showed that the median yearly income of a Trump voter was $72,000, compared with a national average of $56,000. (For supporters of Hillary Clinton, the figure was roughly $61,000.) It is not the have-nots who have powered Mr Trump’s rise, but the have-a-bits.

In the UK, similar forces can be seen in the rise of Jeremy Corbyn. Indeed, research shows that three-quarters of Labour Party members are from the top social grades, known as ABC1. About 57 per cent have a degree.

Mr Sanders, Mr Trump and Mr Corbyn have very different policies, ideologies and strategies, but they are united by an ability to tap into middle-class dissatisfaction with the present order. Some of that anger flows from politicians’ failure to convey the ways in which society has improved in recent years, or to speak truthfully to electorates. In the UK and much of the West, there have been huge gains – life expectancy has risen, absolute poverty has decreased, teenage pregnancy has fallen to a record low, crime rates have fallen, and huge strides have been made in curbing gender, sexual and racial discrimination. Yet we hear too little of these successes.

Perhaps that is why so many who are doing comparatively well seem the most keen to upset the status quo. For instance, pensioners voted strongly to leave the EU and are the demographic from which Ukip attracts most support. Yet the over-65s are enjoying an era of unprecedented growth in their real incomes. Since 2010, the basic state pension has risen by over four times the increase in average earnings. 

Among young people, much of their anger is directed towards tuition fees and the iniquities of the housing market. Yet, by definition, tuition fees are paid only by those who go into higher education – and these people receive a “graduate bonus” for the rest of their lives. Half of school-leavers do not attend university and, in a globalised world, it is their wages that are most likely to be undercut by immigration.

However, we should not be complacent about the concerns of the “angry middle”. The resentment exploited by Donald Trump is the result of 40 years of stagnant median wages in the United States. In Japan and Germany, median wages have not increased in the past two decades. In the UK, meanwhile, the median income for those aged 31-59 is no greater than it was in 2007, and those aged 22-30 are 7 per cent worse off, according to the Institute for Fiscal Studies.

To compound the problem, the wealthy keep getting wealthier. In 1980, American CEOs were paid 42 times the wage of the average worker. They are now paid 400 times as much. In the UK, the share of household income going to the top 1 per cent has more than doubled since 1979. Because of our hyperconnected, globalised media culture, we see more of the super-rich, fuelling feelings of resentment.

As a sense of victimhood extends even to the middle classes, it makes Western democracies much more difficult to govern, with voters oscillating between populists of the left and the right. The political centre is hollowing out. Rather than pander to the populists, we must do more to quell the politics of victimhood by addressing the root of this corrosive sense of grievance: entrenched inequality. 

This article first appeared in the 25 August 2016 issue of the New Statesman, Cameron: the legacy of a loser