the decision of these banks to hand out bonuses as though nothing has changed is unbelievable. The only reason these bankers are still in jobs is because the taxpayer bailed out the system
If you pressed a rifle into the hand of the man in the street and asked him to choose between two targets – an MP or a banker – who do you think would get the bullet? Tricky, eh? It is hard to know which of these two formerly respectable professions has fallen further in public esteem.
Some people might hesitate, like Buridan’s ass, the rifle barrel weaving indecisively between two such luscious hate-objects. Most people would simply call for two bullets.
But then let me ask you a slightly different question. Which of the two species has managed to steer itself most effectively through the crisis? Which type of cockroach has scuttled through the nuclear blast of public disapproval? On the face of it, there is an obvious answer, and it is getting more blatant by the day.
Most of the MPs I know seem to be in a state of nervous collapse. Some of them are on suicide watch. Some of them face the task of sacking their wives and selling the house, or possibly the other way round. Some face penury. Never has Parliament been subjected to such protracted humiliation at the hands of the people.
Then look at the bankers, the bankers whose high-rolling risk-taking triggered the recession that has so exacerbated public rage at MPs. The bankers seem to be waltzing off with a song on their lips and their hands in their pockets – at least, their hands would be in their pockets if they were not stuffed with money. And when I say stuffed, I mean bulging, bursting, ballooning with the biggest bonuses you ever saw.
Boris Johnson now condemns the awarding of giant bonuses:
“London estate agents say they cannot believe the wheelbarrows of dosh that are suddenly crashing through their doors. Savills says the number of buyers from the financial services sector has risen by 48 per cent in the third quarter of this year, purely in the expectation of yet another ginormous Christmas bonus.
A knuckle-cracking realtor in Knight Frank’s Kensington office says he has never seen anything like it: email after email from the boys and girls at Goldman Sachs. “We did our first Goldman’s deal in June,” he tells the FT, “and we are now doing five times as many for its employees as for any other bank.”
How did these bankers come by these new fortunes? How on earth, having been so heavily implicated in the credit crunch, are they are suddenly able to lash out on more stuccoed schlosses in Notting Hill? The BBC has officially gazetted me as the last politician in the country willing to stick up for the bankers. It is a badge I wear with pride. We need a strong and competitive financial services industry, and we need London to be open to talent from around the world.
We need to remember the damage that is caused by protracted high marginal rates of taxation, and we need to fight off poor regulation. But the decision of these banks to hand out these bonuses as though nothing has changed is unbelievable. The only reason these bankers are still in jobs is because the taxpayer bailed out the system.
I don’t just mean RBS and Lloyds. Even the mighty Goldman Sachs would have gone down the tubes, because it was a counter-party to so much of the debt. Now, millions of hard-working people face being asked to work even longer and harder to pay for the economic crisis – and ensuing fiscal nightmare – those banks helped to cause.
These banks can no longer talk glibly about the need to offer competitive salaries to star bankers, and the operation of the free market. Their irresponsibility almost brought the free market crashing to its knees.
How can they pretend that the world hasn’t changed? The banking sector now stands in a completely different relation to the wider public. Their interests, and the interests of the community, have been intertwined by the fact of state intervention, and they need to show they understand that.
They need to grasp why Goldman’s was recently described as a giant vampire squid wrapped around the face of humanity, and why so many people nod approval at that description. Instead of planning to hand out gigantic bonuses to their masters and mistresses of the universe, they should be lending that money to liquidity-starved British businesses.
It is monstrous that good businesses are going to the wall for lack of credit, while bankers are using their taxpayer-funded bonuses to pile back into the yachts and the villas.
They should also find some way – preferably collectively – to show that they understand their duty to the wider community. There is a huge divide between rich and poor in London. The banks could give much more vivid proof of their willingness to bridge that gulf. Because, if they do nothing, if they carry on pretending that it is business as usual, public anger will rightly be irresistible, and politicians will be driven to act.
George Osborne dropped the hint of a windfall tax in his conference speech. Now, Labour is said to be planning some act of confiscation. How can any politician be expected to oppose such measures, when the banks refuse to learn?
If they act now, if they show they understand, if they direct those bonuses now to the good of society, they may be able to avert their comeuppance in the form of tax or regulation.
And it is absolutely no use their complaining that they are all paying a price for the bad behaviour of a few: believe me, that is exactly what the MPs think. There may be time to avert a windfall tax, but time is fast running out.”
The article appears in full in the Daily Telegraph today