Boris Johnson has hugged Barclays too close

The Mayor of London's links with the bank risk damaging reputations in London.

The news today that Barclays have been hit with huge fines for their involvement in the interest rate fixing scandal will have caused great anxiety at City Hall.

While no senior politician can claim to have kept the bank at arms length, there is no politician who has hugged them closer than Boris Johnson. In fact, even before he was first elected Mayor of London, Boris was determined to bring Barclays and boss Bob Diamond into his court.

Asked in April 2008 why he hadn’t named any of his advisers yet, Boris quickly revealed that Diamond was top of his list. Speaking to LBC radio, Johnson said he was “delighted” that Bob would head his new mayoral charity explaining that Diamond was “an extremely wealthy man, and I know how much money they make at Barclays because they rip me off with their charges the whole time."

Diamond and other City big-wigs were singed up to an elite “London Business Club” where the mayor extracted large donations over plates of poached eggs and smoked salmon.

According to one report: “The newly refurbished Savoy played host to the likes of ITIS and Streetcar chairman Sir Trevor Chinn, Goldman Sachs head of economics Jim O’Neill and former chief economist and deputy chairman of Man Group Stanley Fink. They were rubbing shoulders along the breakfast table with incoming Barclays chief executive Bob Diamond, who flipped open his chequebook to deliver a £50,000 donation over the meal.” Boris would later welcome a further £1m in charitable donations from the bank.

Such generosity comes at a price and Boris has since taken to the Telegraph to dismiss attacks on the banking industry as “neosocialist claptrap” and told Londoners to stop “whingeing” about house prices pushed up by city bonuses.

He claimed that a tax on banker bonuses would force thousands to flee the country and campaigned relentlessly for the Conservative government to cut the top rate of tax. While every other politician in Britain was desperate to distance themselves from the bankers, Boris - under the advice of his policy chief Anthony Browne - just hugged them closer. Browne has since gone on to become the head of the British Bankers Association.

When Boris announced that he was launching a central London bike hire scheme it was only natural that Diamond’s bank would be approached.

Boris failed to finance the bikes through advertising like other European schemes. In fact despite promising the bikes “at no cost to the taxpayer” (pdf), Boris’s Barclays Bikes have since cost taxpayers £120m with only “up to” £50m set to come back from the bank. Later one City Hall source told the Standard that the Barclays deal amounted to “payback” for Boris’s support during the financial crisis.

Full details of this payback have never been fully revealed, with City Hall claiming commercial confidentiality on the deal. However a London Assembly investigation into the agreement warned that Boris had risked damaging TfL’s own brand if Barclays later “suffered major reputational damage”.

With calls today for a criminal investigation into the bank, that fear has now been dramatically realised. And in typical style Boris was quick today to insist that “the whole banking industry” should come clean over the scandal.

Whether or not this will be enough to stem criticism of his own relationship with the bank remains to be seen. But with his mayoralty so visibly tied to Barclays and its senior management, Boris will now hope that other banks absorb some of that reputational damage fast.

 

Boris Johnson poses during the launch of the London Cycle Hire bicycle scheme in 2010. Photograph: Getty Images

Adam Bienkov is a blogger and journalist covering London politics and the Mayoralty. He blogs mostly at AdamBienkov.com

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Who is responsible for an austerity violating human rights? Look to New Labour

Labour's record had started to improve under Jeremy Corbyn and John McDonnell. 

The UN has made it clear the Government’s austerity programme breaches human rights. This is not because of spending cuts - it is because because those spending cuts target women and disadvantaged groups, particularly disabled people and asylum seekers.

The degree of injustice is staggering. The Coalition Government used a combination of tax increases and benefit cuts to reduce the net income of the poorest tenth of families by 9 per cent. The cuts faced by disabled people are even more extreme. For instance, more than half a million people have lost social care in England (a cut of over 30 per cent). Asylum seekers are now deprived of basic services.

The injustice is also extremely regional, with the deepest cuts falling on Labour heartlands. Today’s austerity comes after decades of decline and neglect by Westminster. Two places that will be most harmed by the next round of cuts are Blackpool (pictured) and Blackburn. These are also places where Labour saw its voters turn to UKIP in 2015, and where the Leave vote was strong.

Unscrupulous leaders don’t confront real problems, instead they offer people scapegoats. Today’s scapegoats are immigrants, asylum seekers, people from ethnic minorities and disabled people. It takes real courage, the kind of courage the late MP Jo Cox showed, not to appease this prejudice, but to challenge it.

The harm caused by austerity is no surprise to Labour MPs. The Centre for Welfare Reform, and many others, have been publishing reports describing the severity and unfairness of the cuts since 2010. Yet, during the Coalition Government, it felt as if Labour’s desire to appear "responsible" led  Labour to distance itself from disadvantaged groups. This austerity-lite strategy was an electoral disaster.

Even more worrying, many of the policies criticised by the UN were created by New Labour or supported by Labour in opposition. The loathed Work Capability Assessment, which is now linked to an increase in suicides, was first developed under New Labour. Only a minority of Labour MPs voted against many of the Government’s so-called "welfare reforms". 

Recently things appeared to improve. For instance, John McDonnell, always an effective ally of disabled people, had begun to take the Government to task for its attacks on the income’s of disabled people. Not only did the media get interested, but even some Tories started to rebel. This is what moral leadership looks like.

Now it looks like Labour is going to lose the plot again. Certainly, to be electable, Labour needs coherent policies, good communication and a degree of self-discipline. But more than this Labour needs to be worth voting for. Without a clear commitment to justice and the courage to speak out on behalf of those most disadvantaged, then Labour is worthless. Its support will disappear, either to the extreme Right or to parties that are prepared to defend human rights.

Dr Simon Duffy is the director of the Centre for Welfare Reform