The closed circle13 November 2009
Something I didn't expect happened at the Reform conference on the agenda of the new government on Tuesday. Remarkably, it was the speakers on government who argued passionately for reducing privilege, enfranchising individuals and decentralising power. The speakers on the private sector - at least on the narrow issue of the future of the banks - mentioned individuals only to dismiss their importance.
So Ruth Richardson, a former New Zealand finance minister, argued for a fundamental reappraisal of government to make it accountable to people. Zenna Atkins said the same for Whitehall, and Howard Flight and Gillian Fawcett for Parliament. Tory MP Douglas Carswell and blogger Paul Staines said that the internet will help people make choices over public services and politicians. Another Conservative MP, Oliver Letwin, claimed that the reform of public services around the choices of individuals would be the irreversible legacy of a putative Conservative government.
But Hector Sants, the chief executive of the Financial Services Authority, said it was impossible that individuals could ever understand the riskiness of banks. The implication was that an ever more complex regulatory architecture is needed to safeguard our finances. In his view, the end game is global regulation - which, by its nature, cannot be democratically accountable. The other speakers did mention that greater financial literacy in society would help to keep banks honest, but with a lack of enthusiasm that suggested they were only paying lip service to the idea. Regulators would save the day; individuals were nowhere.
It meant that the conversation on government was open, engaging and optimistic, while the conversation on banking was closed and exclusive. It meant that I left with confidence that the public sector will go through a necessary process of change. But I was newly pessimistic about the banks. Letwin spoke of individual empowerment as a "galvanising force". Banking needs that as much as government. Sants and the chairman of the Treasury select committee, John McFall, argued convincingly that "living wills" for banks will make managers more careful (by making it clear and real that no bank is "too big to fail"). But the idea of accountability to customers still went unspoken.
I don't think it's possible that in two or three years' time there will be a consumer revolution in the public sector, but with no consequent surge in ordinary people's power over the banks. The internet will be key to both. But on the evidence of this week's conference, the new power of individuals will be more of a shock to some of our largest companies than it will be to government.