Fact or Fiction? Lord David Freud
Published by Max Salsbury for 24dash.com in Housing and also in Featured
Fact or Fiction? Lord David Freud
As excitement (!) mounts ahead of the housing sector’s involvement in the Universal Credit demonstration projects, we give you 10 facts about one of the Welfare Reform Act’s chief architects Lord David Freud and ask you to work out which one is the fraudulent claim.
1. Great grandson of Sigmund
One of Lord Freud's biggest claims to fame is that he is the great grandson of Sigmund Freud, the Austrian neurologist and founder of psychoanalysis. Both considered controversial for different reasons, Freud senior is notorious for coming up with the 'Oedipus complex' - based on the idea that young boys subconsciously desire to sexually possess their mothers and kill their fathers. David, meanwhile, is known for the theory of Universal Credit, based on the unique idea of ‘making work pay’. Both have been dismissed by academics as over-complicated, nonsensical and inappropriate. David is also related to other famous Freuds including the artist Lucian, the writer and TV presenter Emma (who is married to the screenwriter/director Richard Curtis), PR kingpin Matthew and the broadcaster, writer, politician and chef Clement, who died in 2009.
2. Universal Credit
Widely regarded as one of the architects of Universal Credit, the Government’s flagship welfare reform policy, Freud has been only too happy to sing its praises at every possible opportunity. On paper, it sounds like a no-brainer – simplify the over-complicated benefits system into a single monthly payment that encourages the claimant to take more responsibility for their finances. Due to be introduced next year, there are rumours that the complex IT system required to ensure the new benefits system runs smoothly has been plagued with problems. One Whitehall insider believes the October 2013 launch date is ‘wildly optimistic’ with the most likely outcome being retention of “the existing benefits system, slightly tweaked, with a blanket thrown over it.”
3. Direct payments disaster?
To be fair to Lord Freud, he has never wavered on this one. Despite the pleas of hundreds of housing associations fearing financial collapse, despite empirical research pointing to the fact it will be a disaster, despite the ‘blind leading the blind’ approach to the demonstration projects, and despite being met with opposition in the House of Lords – he is absolutely adamant that the housing benefit component of Universal Credit will be paid direct to the tenant whether they want it or not thus ensuring that social landlords’ primary source of income is put at risk and anyone thinking of investing in the sector will run a mile. You have to applaud the man’s chutzpah, if nothing else.
4. Blame Blair
While Iain Duncan Smith may get universally credited with the introduction of, erm, Universal Credit, it was the previous Labour government under the auspices of the much-loved Tony Blair that you can thank for the concept’s origins. In late 2006, David Freud was asked to provide an independent review of the British welfare to work system. Although one or two proposals were immediately adopted, Gordon Brown effectively shelved the report when he became Prime Minister in June 2007. The Conservative Party, however, were more supportive of Lord Freud’s proposals and promised a “full-blooded version” if they took office. In 2009, he formally joined the Conservative Party and he was involved in the drawing up of the Coalition Government’s Universal Credit White Paper, published in November 2010.
5. Financial Times journalist
Before his days as a banker and politician, Freud was in a far more respectable line of work – as a journalist for the Financial Times. During his four years with the paper, he wrote the Lex column - the oldest and arguably most influential business and finance column of its kind in the world.
6. Stupid banker?
After his FT days, Freud entered the banking world when he joined the broking house Rowe and Pitman shortly before the deregulation of the financial markets in 1986. He rose swiftly towards the top of his organisation, working on more than 50 deals worth more than £50 billion across 19 countries. Despite his obvious ambition and ability, his banking career will be best remembered for his role in a spate of embarrassing and badly managed deals including Eurotunnel, Euro Disney and Railtrack. The Eurotunnel fiasco ended with Freud begging John Prescott for a £1.2 billion bailout of public money to plug the gap in his own overly-optimistic budget projections.
7. Memorable memoirs
Described as “frank and witty” by some, “clumsily written and ethically hazy” by others, David Freud’s memoir ‘Freud in the City’ is seen as an essential read for anyone entering the world of high finance. Freud writes candidly on a life from which he was always somewhat detached and includes some of the most excruciating moments in his career, including the Prescott incident. The book ends with Freud drunkenly vomiting in his office bin after being elbowed out of his firm by a younger, more aggressive, type with whom he struggles to identify.
8. Trading floor banter
Freud’s book is best remembered for the way it captured trading-floor banter in all its “earthy glory”. Typical is this conversation with a colleague following a fractious meeting with his boss over Euro Disney: “I feel like I’ve been raped,” says Freud. “Well, if you were raped, you were standing round the Place Pigalle with your blouse undone, swinging your handbag and asking for it,” says the colleague.
9. Pond life
A keen participant in outdoor pursuits, Lord Freud cycles to work and swims regularly in the ponds of Hampstead Heath. He also conducts his business in functional off-the-peg suits despite being a multi-millionaire.
10. The real Alistair Darling?
During the Credit Crunch, the Government used Lord Freud as a decoy to protect the then Chancellor of the Exchequer, Alistair Darling, from the glare of the media. Due to similar looks and a shared ineptitude when it comes to financial matters, Freud was seen as the perfect substitute for some of the trickier press conferences, including the one on the bailout of Northern Rock. As a result, Freud was given a life peerage by Labour in 2009 – before buggering off to join the Conservative Party later that year.
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ANSWER: Number 10 is the fraudulent claim. Lord Freud did not stand in for Alistair Darling during the credit crunch. It was just a cheap joke made at their expense because they happen to both have grey hair and dark eyebrows.