The disgraced bankers hauled in front of the Treasury select committee this week knew the role they had to play. They were to offer heartfelt apologies and then prepare for a mauling.
And, lo, it came to pass. The committee had its 15 minutes of fame and the television-viewing public were able to witness the masters of the universe brought swiftly down to earth.
Revenge can be sweet and it’s hard to feel sympathy for characters so out of touch with the real world. But now is not the time to get engulfed in a battle over bankers’ bonuses.
The priority is to mitigate the effects of what the governor of the Bank of England describes as a ‘deep recession’. Mervyn King expects the economy to shrink by 3% in 2009 and unemployment, now just short of 2 million, to rise rapidly.
In this climate, it is important to get an effective welfare-to-work strategy in place. However, an expected announcement on the preferred bidders for the Flexible New Deal scheme has now been delayed.
Private providers are nervous about contracts that offer 20% of the fee upfront and 80% when jobseekers are placed in permanent work. The government will inevitably have to review the terms and offer higher initial payments.
Of course, there are many other ways for ministers to intervene. Prime Minister Gordon Brown has already promised a public works programme, but the detail has been scant.
At a time like this, it is incumbent on public bodies – particularly local authorities – to step up to the plate. This is already happening through the creation of 7,500 local authority apprenticeships and agreements to advertise vacancies in jobcentres.
But councils could do more. A simple measure like paying businesses promptly, combined with government aid to employees on short-time working, could do much to save jobs and maintain incomes.
More widely, the PM could allow councils to set up banks and offer mortgages. He could also encourage house building by amending borrowing rules so that council housing isn’t counted as public debt.
Such measures might lack the drama of this week’s goings-on in Westminster, but could do much to help the victims of the financial meltdown.
