Forget the BNP - the financial fascists are in the City of London

The BNP leader Nick Griffin was predictably awful on Question Time . He exposed himself as a tongue-tied demagogue whose repellent views on the holocaust, race and homosexuality are thinly concealed beneath a New Labourish veneer of respectability. What did come as a surprise was how dreadful the rest of the panel was. 


Baroness Warsi, the Tory communities spokeswoman, Chris Huhne, the Liberal Democrat MP and the Justice Secretary Jack Straw spent much of the programme trying out do each other on how tough they would be on immigration, thus doing Griffin's job for him. As did the deputy director of the British Museum, Bonnie Greer, who claimed that we were all Africans because that's where the British came from after the last ice age. Presumably, the European and British collections of the British Museum will be reclassified accordingly. At times I wasn't sure who was more barking, the fascist or his detractors. Fortunately, the audience and David Dimbleby saved the day. 


The BBC's decision to allow Griffin to appear on Question Time was vindicated, and not just because the BNP is, whether we like it or not, a legitimate political party with elected members and a million votes, but because it forced Griffin out of his comfort zone. The BNP leader is a plausible, even fluent performer in conventional news interviews where he's only required to craft a soundbite or two. But when he was exposed to debate, and a live audience, he turned into a guilty schoolboy trying to disguise the fact that he'd been bullying kids with special needs. Really, we have nothing to fear from these people except fear itself.


But what really annoyed me about this particular edition of Question Time was that it ignored the most important issues of the week - the postal strike and the Governor of the Bank of England's devastating commentary on the banking bail out. The Royal Mail has taken leave of its senses and seems determined to commit hara kiri before Peter Mandelson privatises it. Everyone attacked the BNP for quoting Winston Churchill, but it was governor Mervyn King who adapted Churchill's rhetoric to most devastating effect last week. 


“Never in the field of financial endeavour” King told a gathering in Edinburgh, “has so much money been owed by so few to so many. And, one might add, without any real reform.” The £1trillion banking bail out was, he went on, “the greatest moral hazard in history” adding: "It is hard to see how the existence of institutions that are 'too important to fail' is consistent with their being in the private sector." In other words, the behemoth banks need to be broken up or taken into public ownership, just as this column has been arguing all year. I'm not used to finding myself on the same side as the guv'nor, but these are not normal times. 


It was an unprecedented intervention by a figure who is generally regarded a spokesman for the City of London. King condemned the government and the regulators, not just for handing taxpayers money to people who don't deserve it, not just for racking up the biggest public debt outside wartime, but for endangering the future financial welfare of the country by allowing a banking oligarchy to take over the economy. It was like the chairman of the Equalities Commission accusing the government of being racist. 


Now, I'd all but stopped writing about the banking crisis because people seem to have lost interest in it. There's a mood around that the worst is overand that the economy is back on track again, which as King points out is very far from the truth. We are still mired in recession - the longest since records began in 1955 - and the Bank of England is still electronically printing billions of money to try to prevent another financial cardiac arrest. Meanwhile the government is borrowing  13% of GDP with no clear idea of how it is going to pay this money back. 

But it's business as usual in the City where banks are preparing to award themselves a staggering £6bn in bonuses this year, 50% more than in 2008.  Yet, had it not been for the £1 trillion in public money devoted to rescuing them from their own folly, most of these banks would have ceased to exist.  This is not far short of legalised theft. It is not only just the bigglest bail out in history but the biggest bank raid in history by a caste of financiers who clearly believe that they are no longer accountable to anyone but themselves.  The billions the banks are blowing on bonuses are only there because of direct and indirect subsidies from the tax payer. This is most obviously the case in semi-nationalised banks like RBS. But even banks like Barclays, which didn't take cash from the government, have been beneficiaries of the biggest bail out in history. Without the government's asset relief programme, Barclays would be bust, because all the big banks would be bust. 


I'm at a loss to understand why the public has been so quiescent on all this. Why were there no demonstrations outside the Royal Bank in Gogarburn or Lloyds in London? We've developed a very strange set of political priorities, getting worked up about one of the petty criminals of the political world, like Nick Griffin, when the real villains are getting away with grand larceny.  One of the main reasons the government hasn't been tougher with the banking kleptocracy is that public opinion does not appear to demand it. Meanwhile, the banks have been lobbying assiduously behind the scenes, persuading government ministers that if they only allow them to go back to their old ways they'll fill the hole in public finances and start lending to first time buyers. 


I suppose the answer is that bollocking the BNP is easy and makes us feel good – they're fascists, after all. The workings of the financial system are opaque and difficult to understand. It's never quite clear what we want banks to do: lend more to home buyers or less; make credit easier or more difficult. We want the government to spend to save the economy, but we don't want it to leave our children in penury paying off the debt. So we've indulged in self-righteous bear baiting while the real predators pick our pockets. Well, we get the economy we deserve, I suppose.