We splashed this morning on how there will indeed be no major restructuring until after the 2015 general election – after Vince Cable accepted that it would be impossible to implement such major reforms before then. (Although the legal framework will be put in place during this Parliament.)
This would reinforce the Treasury’s insistence all along that there was no major Tory-Lib Dem split over the issue.
So who was responsible for creating the impression that the Lib Dems were adamant on immediate reforms to the banking sector to split retail from investment activities?
Step forward Lord Oakeshott, former Treasury spokesman for the party in the upper chamber, who said in the Evening Standard a few weeks ago:
“What would not be acceptable is for Vickers to come out with a radical solution and then the government not to implement it immediately and in full…Every Liberal Democrat from top to bottom is united about that. It will be absolutely critical – a Lib-Dem red line, bottom line, sine qua non – whatever you want to call it. That will be crunch time for the Coalition. If the Vickers Report is kicked into the long grass, it will be curtains for the Coalition.“
In mid-August Oakeshott was interviewed again, this time by the FT, where he made the same point again:
Can anyone in the Treasury or the banks seriously suggest we kick Vickers’ reforms into the long grass until 2019? When Vickers reports, our coalition must implement it at once and in full. Britain trusts us to sort out the banks once and for all.
Nick Clegg’s party will now argue that waiting for five years or more is not “the long grass”, contrary to what other observers may decide.
Has Vince himself also encouraged the impression that he would settle for nothing other than urgent action? In fact he has not. If you go back through his interviews over the last year, he has avoided words such as “immediate” in relation to the Vickers implementation.
In yesterday’s Times Vince laid into banks which were urging a delay in the reforms (on the basis of the recent eurozone panic) saying that this “special pleading” was “disingenuous in the extreme”. But even then he maintained that implementing the report would require legislation – and would not take place immediately.
Of course this does not preclude the possibility that the business secretary turned a blind eye to the pronouncements of Oakeshott, his more excitable friend, because his words will have gone down well with Lib Dem activists. Such is politics.