Occupy and its ally in the Bank of England

Last night, as part of the New Putney Debates, senior Bank official Andy Haldane said Occupy is "right" about the economic crisis. What kind of friend is he?

Fitting, that we met last night in the main hall of the Friends' Meeting House, Euston. After all, it was Quakers that founded the largest and oldest banks in Britain, Lloyds and Barclays, and would have rallied behind a talk on ‘socially useful banking’ that might re-awaken in those institutions the principles of the founding fathers. Who were ‘we’? A motley crew of five hundred or so citizens, activists, financiers, small businesswomen and men, environmentalists, and many of a title that has proliferated in the last four years: that of the 'amateur economist.'  This was the third New Putney Debate, part of a series of public debates organised by Occupy London and running over the next two weeks. 

Not much in way of comparison, at first glance, between last night and the original 1647 Putney Debates, where members from all ranks of Cromwell’s New Model Army debated the future of England’s constitution in the aftermath of the Civil War and defeat of King Charles I. But the spirit of the Levellers is in Occupy, and in evidence last night. The political movement that brought about those public debates 365 years ago made a popular claim for democracy and the rights of the common man to which Occupy is an inheritor. “The poorest he that is in England hath a life to live as the greatest he”. Then it was the wealthy property-owners that were the oppressors, the 1% to the 99. Now it’s… well… the key speaker last night was there in part to tell us that it wasn’t ‘the bankers’. 

This was the Executive Director for Financial Stability at the Bank of England, Andy Haldane. Billed as a public debate, last night was really, disappointingly, a speech by Haldane followed by a long Q&A: a power balance that made the ‘audience’ or ‘public’ more, not less, fractious. But before the unruly masses, what did Haldane have to say? 

He came with his headline prepared: Occupy is right about the economic crisis (duly picked up by the Beeb, the Guardian, the Indie, the Mail – although, importantly, they switched it to the past tense). "Occupy's voice has been loud and persuasive and policy makers like me have listened and acted," Haldane said. "They've been successful because they've been right"… and here was the sucker punch: they've been right both "morally" and "analytically". You might have expected a sharp intake of breath from the room – here was a powerful cog in the machine (Haldane has served at the Bank for more than 20 years), appearing to say not only that the movement had “touched a moral nerve”, but that it was correct in it’s analysis. Occupy was right. Didn't that mean the Bank of England was… wrong? 

The surprising thing, perhaps, was that it came as no surprise. For Haldane is no cog. Increasingly known as a different kind of policy expert, he has lambasted the narrowing of the economics discipline, admitted the culpability of the central banks in the crash, stressed history, and urged his sector to “listen as often as they speak”. We had turned out - hundreds of us - on a rainy dark Tuesday night, just after the winter clock change, to let him speak, and make him listen.  He was on Occupy territory, or at least in annexed space. His very presence was the news story. 

I’ve been writing ‘we’, and ‘you’ may well query it. But gathered in the hall last night was a public, albeit for one night, waiting to collectively pounce on this rare beast: a member of the financial elite who had promised to listen to ‘us, the people’. It was important, then, that Haldane from the start and repeatedly included himself in this ‘we’. Because what he was positing was a softening of the barrier between 'bankers' and 'bashers', ‘us’ and ‘them’, in the pursuit of a common cause. "We might be in the early stages of a reformation of finance, a reformation that Occupy has helped stir". We had to keep up the pressure, he said, because the world is beginning to develop a new way of banking.  With the glimmering eyes of a man applying his full intellectual faculties to the most profound problem of our century, he outlined his plan to begin the reformation. I’ll lay it out in brief.

He calls them the five C's. Culture (Haldane supports the separation of retail and investment banking as a first step away from risky short-termism in the sector and to prevent cross-contamination). Capital (he proposed tighter regulator standards to provide greater levels of protection). Compensation (payment and incentives had to be tackled, one practical suggestion was to defer bonuses until retirement). Credit (Haldane is a member of a new Financial Policy Committee that the Bank has established to curb booms and busts, and thus deal with debt). And the one that nearly got away: Competition (the barriers to entry for new banks had to be lowered; it must be made easier to switch banks; they could not be allowed to become ‘too big to fail’).

A fine plan for reform. But is this just Haldane, a maverick among money men and mandarins? He would have us believe not. Not only were “skeletons that have built up in the closet over the last twenty years being discovered”, he said, systemic change in the banking sector – if not on the scale he was proposing – were very much in the wind. Lloyds had pledged to end “sales culture”, Britain was no longer leading in the “race to the bottom” on regulation, and now was aiming at “the top”, the emphasis shifting towards proving to investors that markets here are “safe”. And this was just the beginning. He believes that “we'll be lucky if our children pay for this and not our grandchildren” and what this means is if the changes he proposes aren’t enough, more will be done. It’s inevitable, with or without his influence. 

He sat down to earnest applause. The room fizzed with tension, as the panelists responded, and the 'audience', the 'public', ‘we’ got ready for our turn. Richard Paton, the only panelist from Occupy, opened the floodgates. "There's a gap between what senior technicians and commentators like Andy Haldane are saying and what our political leaders accept or even talk about."  Bang. A stir of recognition from the floor. Duncan Weldon, TUC senior economist, was the first to use the term ‘political economy’, as he asked Haldane what was for me the question of the evening: “Doesn't power matter?”

I have never seen so many hands up in a Q&A session. At any one time, for an hour, 50 or 60 people were waiting – by the end, they were shouting from the floor. Again and again, Weldon was answered by our questions: yes, power matters, a nexus exists between politicians and the financial sector; until this is broken, even figures like Haldane are pissing in the wind. 'How can we have your financial reformation, when the rich and powerful can still use their tax havens?' (huge applause) ‘How do we change our corporate governance structure to recognise a wider set of stakeholders?’ ‘Why, when the people who look after our health swear to practice ethically, aren’t those who look after our money made to pledge the same?’ The message was put most succinctly by a fresh-faced blonde in his 20s, enraged at the growing disparity of income and power in Britain: “Aren't you being complacent?” 

Occupy have a powerful friend in Andy Haldane. He has once again risked his skin, incurring the wrath of the very nexus that he is understandably loathe to name: the Square Mile, Westminster, the Bank and the global “asset-rich” and “owner-occupying rich” that he spoke of as beneficiaries of the recession. He is right that the ‘policy makers like him’ who are listening to Occupy need the movement to carry on applying pressure, precisely because we are (most of us) free to speak – another difference between those in the room last night and the radical Levellers in the New Model Army. I’m encouraged by the New Putney Debates. Occupy needs to experiment with new ways to engage the public and inform itself. If the movement can use the next fortnight to talk to allies within the establishment, as we did last night, there is a real chance of recapturing momentum. The poorest he hath a life to live as the greatest he. A truth as compelling and demanding today as it was when Cromwell's soldiers gathered to debate the aims of a Civil War, more than three centuries ago.

About the author

Niki Seth-Smith is a freelance journalist and former Co-Editor of OurKingdom.