Serious historians of the Decline and Fall of the British Empire of date the beginning of its demise to the crisis of 1878. [1] This was the year that the Bank of England, the whole British financial system, its whole cast of mind, failed utterly to rescue the Glasgow shipbuilders and their banks. The very idea of the state or any other institutions acting for a general good was anathema to Victorian minds, schooled on a mantra of low taxes, ultra-free markets and Proud Finance. Slowly but inexorably Britain lost its lead it in what was then the cutting edge technology of that era, and the decline of economic and political supremacy had begun. It’s been pretty much downhill ever since.
Which is why we think the British Government’s decision to rescue the UK victims of the SVB Bank collapse, via the good offices of HSBC, is significant. It’s not what they’ve done, it’s the way they’re starting to think. Get these two killer quotes, from this excellent report by Kalyeena Makortoff of the Guardian
first from Chancellor of the Exchequer (that’s the senior Finance Minister) Jeremy Hunt
I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise,”
then from Dom Callas of start up lobby group Codec
the government deserves huge credit. From the very top, to HM Treasury who understood the challenge and gripped it, to the huge number of civil servants who have likely not slept since Friday. They have saved hundreds of the UK’s most innovative companies today.”
Governments! Civil Servants! Saving jobs! Just like in Europe! They’ll be making us drive round in Audis and drinking Kronenbourg next! Oh, horrors!
There is a long, long way to go. The gin-sodden certainties of the golf club bar are still too prevalent. The Daily Mail still has a veto on too many areas of our national life. And, as we write, the risks of a systemic collapse cannot be discounted, as the recent travails of Signature Bank show. [3] But our rulers have been forced at last to recognise a truth long known in places like South Korea and Germany. If there is to be a common good, it needs to be serviced by the collective efforts of Banks, Governments, Civil Servants and people who actually make things. Just don’t call the The Blob.
[1] Hutton, W: The State we’re in Jonathan Cape 1992 see pp 119-122
[2] https://www.theguardian.com/business/2023/mar/13/hsbc-buy-silicon-valley-banks-uk-tech-startups
[3]https://www.nytimes.com/2023/03/12/business/signature-bank-collapse.html
#industrial policy #banks #industry #uk government #SVB Bank #Signature Bank #technology #innovation
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