Gordon Brown has admitted that Labour were too light-touch with punishing the bankers responsible for the 2007-08 global financial crisis, stating some should have gone to jail.
In an interview with the Sunday Times, the former Chancellor turned Prime Minister said “there should have been prosecutions,” adding that while he would not interfere in the work of potential prosecutors, “what you can do is change the law and make it tougher on people - and obviously we would have done that if we’d got back into power”.
While Brown's response to the crisis - bailing out Lloyds Bank and Royal Bank of Scotland - helped stem the worst of its affects, the UK still fell into a deep recession.
He also brokered a $1trn global stimulus package, hailed as “historic” by Barack Obama at the G20 in London in April 2009, but he conceded to having neglected the domestic audience, adding that “I spent too much time trying to solve the financial crisis and organise the international community”.
He also expressed regret at not having taken the gloves off with bankers, pointing out that even John McCain, Obama’s Republican rival, attacked Wall Street in America’s 2008 presidential election.
“We didn’t explain how culpable the banks were and what we were actually doing to deal with these problems,” Brown stated in the interview. “We had dealt with issues like bonuses, all the leaders of these major financial institutions left - we didn’t allow them to stay on - but we didn’t really explain that to the public.”
Brown’s Treasury has since been criticised for regulating financial services too loosely, arguably making oversight less effective by stripping the newly-independent Bank of England of its watchdog functions.
“We should have done more about the banks,” he said. “But if you’d been writing your columns in 2005, ’06, ’07 and ’08, you would have been writing about City leaders saying they were over-regulated.
“Every time I met Fred Goodwin [the former RBS boss, stripped of his knighthood in the wake of the financial crisis] he was complaining that he was over-regulated.”
Brown's latest book is focused on the rise of nationalism, which now appears well-timed given Russia's invasion of Ukraine.
“We’re entering a new era of geopolitics, and nationalism is the dominant ideology,” commented Brown. “Politics is actually now more important than economics.
“Whether it’s Putin with his invasion of Ukraine or China with Taiwan, or America being very defensive about the retreat from Afghanistan and moving back into an ‘America first’ position, nationalism is actually the biggest political force in the world today.”
In Seven Ways to Change the World , which he published last year, Brown diagnoses the cause of 'us-versus-them' nationalism as the financial crisis and the uneven recovery that followed, with low interest rates and quantitative easing inflating asset prices, but low growth eroding living standards.
“People feel they’ve got far less control over the decisions that affect their lives - and nationalism wants people to believe that unless there is a change in the regime, or the border, you will always remain a second-class citizen.”
In a new chapter Brown is writing for the paperback edition, he addresses the Ukraine crisis directly, calling for Russia to be brought before international courts for “atrocities that cannot go unpunished”.
He adds: “Europe cannot ever be the same again, for this is also a fight to the finish between competing nationalisms.”
As for nationalism at home, he noted that “the SNP will not stop arguing for independence,” as that’s their rationale.
“I think you’ll find they’ll produce a prospectus quite soon saying that breaking free from Britain and having fiscal autonomy would cause no problems to Scotland, in contradiction to all the evidence … so people in London who think the issue will just go away if you have new leaders — this has got to be dealt with at a higher level than that.”
The Labour Party's collapse in Scotland since Brown's time in charge was “avoidable” and “not inevitable”, but he believes it stemmed from “an unwillingness to face up to some of the arguments” and an inability to make a patriotic case for the union.
Brown said he has been frustrated by the way the SNP has tried to make “Scottish cultural identity antithetical to British citizenship”.
“A Scot is head of the Supreme Court, and the deputy head is a Scot,” he starts, before continuing: “A Scot is speaker of the House of Lords, the biggest manufacturing business in Britain, Unilever, is headed by a Scot, the biggest energy company, Shell, is headed by a Scot, two of the three biggest trade unions are headed by Scots, MI5 is headed by a Scot — and you’re sitting here in Scotland and nobody here knows this.
“Whereas 25 years ago people would have been proud of Scots taking up these positions, nationalism is so deep-rooted now that it’s almost seen as an aberration.”
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