View all newsletters
Receive our newsletter – data, insights and analysis delivered to you
  1. Analysis
  2. Blogs
March 13, 2017updated 23 Mar 2018 11:17am

A warning from the credit-crunch UK chancellor

Leasing Life editor Brian Cantwell reflects on the comments from Alistair Darling at the FLA dinner, as the former Chancellor cautions the leasing market about the potential volatility of the Brexit negotiations.

By Brian Cantwell

There have been six years of consecutive growth in the UK for Finance and Leasing Association (FLA) members, as the economy has recovered and grown from the credit crunch around a decade ago.

The industry has learnt from its experience in that time, and most are looking to risk strategies and due diligence on new business as much as strategies on how to acquire it.

So there was an element of recognition at the comments of the FLA after-dinner speaker, former UK chancellor Alistair Darling, who oversaw the government response to the credit crunch between 2007-2010, as he addressed concerns about the UK economy over Brexit on February 28th in London.

“We, as a nation, have bought a ticket to a very uncertain destination and we need to understand the differing points of view on both sides of the channel,” said Darling.

“I have never heard of a negotiation where you get everything you want. Whatever we get will not be as good as what we have at the moment.”

The next day the news came in that the house of lords had rejected the Article 50 Bill sent to it from MP’s in the house of commons, and suddenly it looks as though the March 15th deadline to trigger Brexit might slip.

This leads one to wonder whether the timeline of Brexit is as straightfoward as the politicians have been saying.
But whether the timings stick or not, the exit is still desired, said Darling.

He warned that there must be some feedback from parliament on any prospective deal.

“You can’t exclude parliament from having a vote on the agreement the government reaches as part of that process. It would be democratically wrong to exclude parliament.

“There is a substantial chance there will be a car crash in two years time. Don’t underestimate the difficulties you will face. It will be a long and tortuous process.”

Whatever his politics, this is a man who essentially saved the British banking system in 2008, and has a track record of risk management, to say the least.

As an example of the situations he found himself in, Darling recounted the (now notorious) emergency overnight meeting he had with RBS when the liquidity crisis the bank had was at its most severe.

After being presented with the situation that RBS cash points could close provoking a rush on the high street, Darling asked the RBS banker; “How long have you got?”

“About two or three hours,” came the reply.

The bailout went through, and our economy survived.

Let us hope that the prudence shown in 2008 is clear in the mind of our government during the forthcoming negotiations about our best interests.

Brian Cantwell
brian.cantwell@www.verdict.co.uk

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A weekly roundup of the latest news and analysis, sent every Thursday. The leasing industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU