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Clegg’s weakness means banks can stick up two fingers yet again
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8 January 2011
I fear even more literals than yesterday as today it is my desktop that is giving me Internet accesss grief so I am using the iPad again, complete with tippytappy touch typing on slidey screen, and inability to read over when done.
First, a plug for a superb piece on journalism by John Lloyd in the FT. It is too long for me to rehearse his arguments here but do try to see it. John is that rare breed, a journalist who thinks about journalism more deeply than those who simply see it as a question of where the next sensationalist story is coming from.
Second, another plug for the FT and in particular the lead story headlined 'Banks defiant on bonuses for chiefs.' This is clearly the latest issue on which the two governing parties intend to have said one thing in opposition, and in the early heady days of government, and quite another when it comes to crunch time.
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The paper reports that bankers feel their 'sacrifice'(my word) of bonuses last year and of their big donations to charities were not appreciated by politicians or public. It adds 'bankers have also been emboldened by the apparently fading influence of the Liberal Democrats.
That is fascinating. It shows why the chemistry of the coalition matters. Nick Clegg's influence is fading for two reasons - first because this is largely a Tory government pursuing Tory policies people did not vote for, and he is giving cover to that. Second, because the tuition fees broken pledge was the one which attracted the most attention.
There have been many more but the Tories are proving very adept at shifting the focus of blame. So even the banks and bonuses becomes their problem.
It is for this reason that Cameron wants the Lib Dems to win the Oldham East and Saddleworth by-election. Far more serious though is similar 'got to do Nick a favour' on controls orders. Playing around with a bit of tactical voting is one thing. Playing around with issues of security, just so Nick can say to his Guardianistas that he 'won something' is quite another.
As for the bankers, they're laughing all the way to their place of employment. Cameron and Osborne never really wanted to hit them hard. Clegg and former Saint Vince are weakened. So it's two fingers to the lot of them, take the money, take the hit and move on. The banks won't much care about the increase in opprobrium. Cameron and Clegg ought to but for different reasons there is not much they can do about it.
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I would say it is not Clegg’s weakness that has any effect of the bankers attitude and bonus culture continuance – and I think saying so does you no service.
The fact remains that all our politicians have been and will be supine to the financial institutions and their ability to use international freedom of movement to kidnap legislators and politicians and stick two fingers up at the whole of humanity…
Brown and Blair could no more handle this than any other leadership – Clegg being your pet whipping boy after Cameron is an irrelevance at best..
Absolutely agree re the control orders point. Cameron is intending to do something he believes to be wrong in order to let Clegg say he has secured change for the Lib Dems and a manifesto commitment. The coaltion risks becoming an embarrassment
That is so weird … I rarely see the FT … was on a train to Bristol this morning … read your blog on my blackberry … the man opposite me got off at Reading, leaving his FT … so I read John Lloyd. Superb article. So refreshing to read a journalist challenging journlism in this way. Used to happen a lot more. Now they all bow down before the idea that public interest is what interests the public or what damages public figures.
So you read the FT today then – I was hoping you might venture into the Simon Hughes story. You said he would be a problem for them and it is clearly starting.
The bank levy will raise about £2.5bn a year. In 2010 bankers´ bonuses will be £7bn.
Labour MP Chuka Umunna has said that the levy is “walk in the park” for the banks. Anyway, a cut in the corporation tax will more than outweight the bank levy.
Irresponsible behaviour of British banks in not being punished. Almost a trillion has been poured to banks in bailouts. Lost output due to banking crisis will cost even more in the future.
Yet it is the taxpayers who are paying the bill for all this.
The City provided £66bn of tax revenues in 2009 and accounted for 10% of GDP. It has an army of lobbyists. Messrs Cameron and Osborne are afraid of upsetting powerful interests, so they blame Labour for the “mess” instead of the real culprits.
The average income of a FTSE 100 chief executive is over £3m a year – more than 100 times the median household income. In 2009 these people enjoyed a 55% rise in earnings.
People with less wealth are more charitable, generous and helpful. They have greater empathy than the rich. More vulnerable need to co-operate to survive.
Banks are not lending to small businesses. So much for 2.5m new jobs Mr Osborne believes the private sector will create. Private sector will not be able to compensate for public sector cuts in a weak world economy. We already know that the gamble of the Tory-led government will not work.
Lawful tax avoidance costs £25bn a year. £75bn a year is criminally evaded, £25bn not paid.
Third of world´s wealth in held offshore.
A proportion of tax paid by big companies fell during the boom years. Third of the FTSE 100 paid no tax in 2005-06!
We can only be intensly relaxed about people getting filthy rich if they pay taxes.
A Robin Hood tax would bring in £20bn without hurting banks.
One percent tax on land values would be worth £50bn a year.
So there are alternatives to cuts. It is all about political choice.
Ps. Excellent news on Ed Miliband´s article in the Times. C4´s FactCheck blog has now confirmed that the drop of tax receipts triggered by the economic crisis is behind the bulk of £149bn deficit.
Have to agree about the FT. I have become increasingly irritated with the Guardian’s unquestioning anti Labour pro LibDem line and also at basic poor quality journalism. On too many occasions I found myself with questions about what was left out of an article because it didn’t fit the writer’s view of the world. The Telegraph is just as bad but too right wing, the Independent has too little political coverage for my liking. My dad always thought the FT was more honest in their reporting because they knew the ‘oiks’ weren’t reading it. I now subscribe to the FT online and for a few pounds a week it is good value. It certainly isn’t a pro Labour paper but I feel all shades of opinion are represented and on the whole relies more on fact than comment.
Olli – I like what you say, and how you say it. But the content makes me boil.
Today I should be with my kids, but they are away as I come to grips with setting up a new business venture. The amount of work is phenomenal and I’m totally out of my depth. But I’m plodding on, will get through it and hope to come out the other end sane. And one day I might even enjoy what right now seems like a millstone. Your figures baffle me. Last academic year I earnt £8000. Not much. But for us it makes the difference between paying the mortgage or not and having a two week UK holiday or not. Not working is not an option. Most of that £8000 of public sector money I earnt was spent by the Government tutoring children who were underperforming in state schools. I was even nice enough to give some back in tax ! Modesty aside, my work made a real difference to most of the kids I taught.
But now the Government are saying that it is not worth doing. I’m not worth it. Even worse, the kids I teach are not worth it. But these people mentioned above are? It’s Ok to pay them that much because of what exactly? Why do they get this, when people like me all over the country, and the groups we are trying to help, are being screwed because of them? And yet they remain unscathed.
I love the stuff you write Olli, but the real significance to the economics will be the stories behind the figures. Mine is not a tragedy. It is a great big sorry pain in the arse. But the tragedies will come very, very soon. But to Dave and Nick that is OK as long as this bunch of greedy bastards are sorted.
Sarah,the work you do is outstanding because some of these kids lives are marked out for them as soon as they’re born, |I know because I’m a school governor.
To most of the coalition though they would make good chimney sweeps.They don’t care.
Sorry Mr. Campbell this is completely off today’s topic and I’ll of course understand if my comments do not get posted.
Yet Again the Punishment Does Not Fit the Crime. I refer to David Chaytor. I do not condone what he has been found guilty of, but to imprison him for it is way out of proportion imo. Surely a more fitting punishment for such a crime would be to make the offender repay what they stole, plus an additional amount also, even if it meant they were repaying it, in small amounts, for the rest of their lives. It certainly makes no economic sense to send someone who is not a danger to the public to prison. Having the tax-payer foot the bill to deprive someone of their liberty, makes no sense on any level. Some of the archaic laws of this country are in urgent need of reform, it seems to me. Others may well have different views.
Quinney, you are dead right. One of the things that makes me so angry is the accident of our birth. George Osbourne was born with a silver spoon stuck up his backside. It gives him power. Other kids are born into grinding poverty. It gives them nothing. And so by a random accident are power and opportunity dished out.
Mmmmm……re-reading that that does make Osbourne sound like some odd super hero.
Spoon-Boy???????
Alastair – now you are financially secure but no longer in front line politics the most useful thing you could do would be to do some thinking and blogging about what New Labour got wrong. Seems to me you spend most of your time trying to defend what you did including the many things you got wrong.
1. First up was the love affair with the City and the failure of light touch regulation. Labour surely has to know acknowledge that before it can say anything credible on the banks or bankers.
2. Control orders – dear oh dear. You need to understand that you started out being “tough on crime and tough on the causes of crime” and ended up just being authoritarian and anti democratic in order to keep Murdoch and the Tory Press happy. I appreciate you have a different view but does it worry you just a little bit that the Tories and the LibDems are promoting a more progressive policy on crime.
Alistair
Have you noted that the BBc news outlets make no mention of the 2 opinion polls showing the prospect of Labour romping home in the Oldham East by-election. Shhh. don’t upset the tory dominated coalition.
Alan Hardwick
I get so annoyed at the number of people who try to blame the economic crisis either on a) the labour government or b) the level of personal debt, The latter is indeed an issue but not an issue that created what was rightly called the ‘banking crisis’. The crisis was caused by greedy ‘casino bankers’ (Mervyn Kings words) generating fat bonuses for themselves through investing in (betting on) mark-to-market CDOs.
So we now find ourselves in the position where we ‘are all in this together’ but the people who caused the problems are sharing multi billion pound bonus pots and the vast majority of the population are facing job insecurity and cutbacks in policing, education and the health service.
The only silver lining in this has to be the hope that people now see the differences between the labour party and the Conservative / Liberals