Vickers' "electric fence" - are bankers' DIY skills up to it?

Cows, cricket, and dangerous fences.

John Vickers, the man who has laid out the plans for a redesigned  Vickers Report recommended the separation of retail and commercial activities.

Last month, having digested Vickers’ recommendations, the Parliamentary Committee on Banking Standards published its own report, advocating the “electrification” of that ring fence.

Last week, John Vickers appeared in front of the Committee to endorse the proposal. “I welcome anything that reinforces the ring fence and, in particular, I welcome this committee’s proposal to that end,” he said.

“We are now 16 months on from publication of the final report, and nothing has happened in that period which makes me doubt that ring fencing is the right structural ingredient, along with others – loss absorbency and so on – for banking reform in the UK.”

At the time the Vickers Report was published, many in the banking industry were sceptical as to whether a fence could be erected at all. Senior bankers are not known for their DIY skills… And that was before any talk of passing a current through it.

However, the solution has become generally accepted as preferable to the Volker Rule that is currently causing panic on the other side of the pond. In order to avoid similarly draconian measures being adopted here, most bankers are keeping quiet.

But one committee member, Mark Garnier MP, wanted to make sure that Vickers had faith that bankers would resist the temptation to wield the wire cutters. “Is it inevitable that banks will try and test the limits of the ring fences?” he asked. “And is there a commercial advantage in doing so?”

In response, Vickers painted a surprisingly bucolic scene. “I can’t think about this topic without reference to my own experience, in a rural cricket match a long time ago,” he reminisced. “I was on the boundary, and there were cows in the next field.

“I didn’t realise how much power there could be in an electric fence until the ball whizzed past me and I went to get it.

“Having had that experience, I wouldn’t test the boundary. In fact, I’d try and field much closer in.”

A cautionary tale that I’m sure the UK banking industry will give full consideration to. But I have my own electric fence/cricketing anecdote.

At school, our cricket pitch was surrounded by an electric fence to stop errant woodland creatures defecating on the square. It may have been effective in that aim, but did not do a great deal to prevent errant schoolboys from weeing on it. And trust me, despite YouTube evidence to the contrary, it really didn’t do anyone much harm. Indeed, in those pre-mobile, pre-internet days it passed as entertainment.

I guess it really comes down to just how much current you pass down the wire, and whose hands are on the voltage dial. Those are going to be very difficult decisions to make indeed. As admirable as Vickers’ faith in humanity is, most of the investment bankers I know would look at an electric fence as little more than a potential practical joke.

The “electrification” of that ring fence. Photograph: Getty Images

James Ratcliff is Group Editor of  Cards and Payments at VRL Financial News.

Dan Kitwood/Getty
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I believe only Yvette Cooper has the breadth of support to beat Jeremy Corbyn

All the recent polling suggests Andy Burnham is losing more votes than anyone else to Jeremy Corbyn, says Diana Johnson MP.

Tom Blenkinsop MP on the New Statesman website today says he is giving his second preference to Andy Burnham as he thinks that Andy has the best chance of beating Jeremy.

This is on the basis that if Yvette goes out first all her second preferences will swing behind Andy, whereas if Andy goes out first then his second preferences, due to the broad alliance he has created behind his campaign, will all or largely switch to the other male candidate, Jeremy.

Let's take a deep breath and try and think through what will be the effect of preferential voting in the Labour leadership.

First of all, it is very difficult to know how second preferences will switch. From my telephone canvassing there is some rather interesting voting going on, but I don't accept that Tom’s analysis is correct. I have certainly picked up growing support for Yvette in recent weeks.

In fact you can argue the reverse of Tom’s analysis is true – Andy has moved further away from the centre and, as a result, his pitch to those like Tom who are supporting Liz first is now narrower. As a result, Yvette is more likely to pick up those second preferences.

Stats from the Yvette For Labour team show Yvette picking up the majority of second preferences from all candidates – from the Progress wing supporting Liz to the softer left fans of Jeremy – and Andy's supporters too. Their figures show many undecideds opting for Yvette as their first preference, as well as others choosing to switch their first preference to Yvette from one of the other candidates. It's for this reason I still believe only Yvette has the breadth of support to beat Jeremy and then to go on to win in 2020.

It's interesting that Andy has not been willing to make it clear that second preferences should go to Yvette or Liz. Yvette has been very clear that she would encourage second preferences to be for Andy or Liz.

Having watched Andy on Sky's Murnaghan show this morning, he categorically states that Labour will not get beyond first base with the electorate at a general election if we are not economically credible and that fundamentally Jeremy's economic plans do not add up. So, I am unsure why Andy is so unwilling to be clear on second preferences.

All the recent polling suggests Andy is losing more votes than anyone else to Jeremy. He trails fourth in London – where a huge proportion of our electorate is based.

So I would urge Tom to reflect more widely on who is best placed to provide the strongest opposition to the Tories, appeal to the widest group of voters and reach out to the communities we need to win back. I believe that this has to be Yvette.

The Newsnight focus group a few days ago showed that Yvette is best placed to win back those former Labour voters we will need in 2020.

Labour will pay a massive price if we ignore this.

Diana Johnson is the Labour MP for Hull North.