The question in Westminster today is whether George Osborne – on the Today programme – softened the Tory position on Obama’s banking reforms.
It’s the wrong question. The right one should be: Did Osborne last night temporarily harden the Tory position on the issue? And if so, why?
Today the Tories have returned to their nuanced stance of last summer, when Osborne launched a paper on banking.
At that time Osborne said there was a “case” for separating risky investment banking activities from retail banking – but said it would not be sensible to do this unilaterally. The actual paper was even less wholehearted, saying merely that the Bank of England would be asked to examine the case for splitting banks’ activities.
Osborne’s emphasis on Today was that Obama has created the “space” for countries to do this multilaterally – but the UK wouldn’t do it alone.
So why is there any confusion? Arguably it was the Tory response last night which was gave an overly enthusiastic impression of the their position.
Tory aides are blaming over-excited journalists” (could they mean Peston?) for reporting a less nuanced position than their true stance.
But we were all sent a press release expressing enthusiasm for the Obama move and condemning the prime minister’s refusal immediately to follow suit.
The release – to be fair – said the proposals had to be done internationally; but also quoted the shadow chancellor saying: ”Gordon Brown has repeatedly opposed the specific action which President Obama has today announced. He now looks very isolated.”
“This is a welcome move by President Obama that accords very much with our thinking. I have said consistently that we should look at separating retail banking from activities like large scale propriety trading – and that this was best done internationally.”
We were also told this was “definitely something we think needs to be done”.
To answer the question of why the Tories would want to send out a strong signal last night: er, there’s a general election coming, and bankers are not exactly popular right now.