London has to survive the bust

London was hit hard and early by City redundancies but the North, West Midlands and Wales are now showing similar or worse job losses. This may well be used by politicians as an argument for increasing support for the regions at the expense of the capital.

It is true that London's economy is benefiting from sterling's fall. But unemployment in parts of the capital was high already, which means the increase in joblessness is less marked now. Moreover, many City workers live outside central London. The argument that things are worse elsewhere cannot become an excuse to neglect the capital.

There is another obvious aspect to unemployment, which is that it is falling disproportionately on the private sector. Indeed, one institution, the Chartered Institute for Personnel and Development, has gone so far as to call the public sector a recession-proof zone. It is certainly true that compared with the retail sector and what remains of manufacturing, state employees have been immune to the worst of the downturn in job losses and pay cuts. This matters, particularly given the big increase in the size of the public sector under this Government. In the interests of equity as well as economic reality, it cannot be business as usual for state pay and pensions, when the rest of the economy is weathering the worst of recession.

Tame the banks

LORD Turner's recommendations for an overhaul of the banking sector have been welcomed by the CBI and will be taken to heart by ministers but they should, by rights, make the Government feel profoundly uncomfortable about its part in the financial crisis. His analysis makes clear that the problems with the system were systemic, not just errors of judgment by individuals within individual institutions. The regulatory system established by the Government in 1997 was far too narrow; his proposals for reform would change all that. And, as chairman of the Financial Services Authority, he has the remit and the will to give them clout.

Lord Turner's proposals would ensure that banks have sufficient capital to insure them against future losses. In other words, they would be obliged to build up reserves in the fat years to see them through the lean ones. They would, moreover be obliged to hold more cash, to make them less dependent on credit from the money markets. The FSA itself would be obliged to focus on the big picture, on the business models of individual firms and on credit conditions in the country as a whole. Credit ratings agencies - now thoroughly discredited by virtue of giving their highest ratings to flawed financial products and companies - would be more tightly regulated.

Of course there are risks that, once the crisis is over, regulation might go too far the other way. But the best that can be said of this report is that, had it been implemented a couple of years ago, we would not now be in our present, disastrous mess.

Bad language

THE Local Government Association has issued a list of 200 banned words and phrases to councils, including the irritating "stakeholder" and "proactive" as well as "predictors of beaconicity", which means how to decide if something works. Instead of "meaningful consultation" it suggests "talking to people". This is a good start, but if it were applied to Westminster, what would happen if politicians had to say what they actually meant?