Column: Are there any silver linings from the latest banking scandal? (From Lancashire Telegraph)

Column: Are there any silver linings from the latest banking scandal?

11:59am Thursday 5th July 2012 in Opinion By Jack Straw , MP for Blackburn

Are there any silver linings from the latest banking scandal?

There needs to be, given the damage already caused to Britain’s reputation from the revelations that staff in Barclays sought to rig the key interest rate for lending between banks.

It would of course have been far better if our banks and financial institutions had been behaving ethically, by the rules which they expect customers to observe.

But I can see two linked benefits from the opprobrium which now surrounds our financial institutions.

The first is that we should see a stop to those at a senior level being paid ridiculous amounts, on the threadbare excuse that they are an exclusive group for which the rest of us should be deeply grateful for the benefits they bring to the UK.

The second is that there is a sustained rebalancing of the economy in favour of one of our traditional strengths – manufacturing – and through that, more wealth spreading to the Midlands and the North.

Indeed, there is some evidence that is starting to happen, with manufacturing output increasing as a share of our GDP in both 2010 and 2011.

Over the last three decades, too many of our brightest and best have made their careers in finance.

That includes a quarter of physical sciences and engineering PhD graduates.

We need these people to be attracted back to manufacturing, where they can make direct use of the skills taxpayers have invested in.

If this were to happen, then it’s that vast majority of people who live outside London and the south-east who would benefit.

That’s urgent.

For example, jobs in the north-east and north-west of England are currently being lost at four times the rate of the rest of the country (an increase in job losses of 18 per cent in 2011, compared to 4.5 per cent in rest of England).

In recent years, we’ve all been mesmerised by the alleged importance of the City of London – and Labour should have done more, sooner, to help manufacturing.

This latest crisis presents us with a chance to put that right.