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

Felipe Araujo
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Hull revisited: What happens when a Brexit stronghold becomes City of Culture?

We report from Hull, to find out if you can replace the kind of nostalgia that led to a Leave vote with cultural investment.

At 75 metres long, the offshore wind turbine blade erected across Queen Victoria Square, in the heart of Hull, is a sculpture intended to mark a new chapter in the city’s history. For the next 12 months, Hull, a city of more than a quarter of a million people in the northeast of England, will be the UK’s City of Culture.

The 28-tonne blade hails from the local Siemens plant. The German technology company employs around 1,000 people in the area, making it Hull’s biggest single employer.

Seen up close in this context – laid dormant in the middle of a town square instead of spinning up in the air generating energy – the structure is meant to remind passersby of a giant sea creature. It is also, I’m told, an allusion to Hull’s rich maritime history.


All photos: Felipe Araujo

Nostalgia is a big thing in this part of the country. At one point, Hull was the UK’s third largest port but technology and privatisation drastically changed that. The battle over cod fishing with Iceland in the waters of the North Sea 40 years ago has also dealt a major blow to a region with a long and proud trawling tradition.

People here still talk about a bygone era when the fishing industry provided jobs for everyone and there was enough money to go around.

Fast forward to 2017, and the country’s new capital of culture is the same city that voted 67 per cent in favour of leaving the EU last June. Its new-found prestige, it seems, is not enough to erase years of neglect by a political class “too busy for commoners like us”, as one resident puts it.

“More than a message to Brussels, it [the Brexit vote] was a message to Westminster,” Paul Leeson-Taylor, a filmmaker born and bred in Hull, tells me. “For the first time in a long time people in Hull felt like they had the chance to change something, and they took it.”

But while speaking to people on the high street and hanging out with locals at the Community Boxing Club in Orchard Park, one of the city’s most deprived areas, there is one word that consistently popped up in conversation – more than any specific policy from Westminster or the much-hated rules “dictated” by Brussels. Foreigners.

According to official figures, Hull’s population is 89.1 per cent white British. Still, immigration is big on people’s minds here.

During my two-day stay in the city, I find myself being the only black person in most places I visit – I’m certainly the only black guy at the boxing club. So when someone begins a sentence with “I’m not racist but…”, I know a tirade on immigrants is about to ensue.

“There are just too many of them,” Nick Beach, an estate agent whose Polish clientele is a big part of his business, tells me as he is about to teach a boxing class to local children. Beach was born in Shepherd’s Bush, in West London, but has been living in Hull for the last 20 years.

“When I go down there these days and go into Westfield shopping centre, it is very rare you get an English person serving you now,” he says. “I just find it disappointing that you go into your capital city and you are a minority there.”

These are the much-discussed “left behind”, a white working-class community that has gained particular prominence in a time of Brexit and Donald Trump. Under economic pressure and facing social change, they want to have their say in running a country they claim to no longer recognise.

For Professor Simon Lee, a senior politics lecturer at the University of Hull, immigration is only a superficial layer when it comes to explaining the resentment I witness here. For him, the loss of the empire 70 years ago is still something that as a country Britain hasn’t come to terms with.

“The reason for us to be together as a United Kingdom has gone, so what is the project?”

As destiny would have it, a foreign company will now play a major role on Hull’s economic future, at least in the short term. In the wake of the Brexit vote, there were widespread fears Siemens would pull out of the region and take its factory elsewhere. With the massive blade looming large in the background, Jason Speedy, director of the blade factory in Hull, assures me that isn’t the case.

“The Brexit decision has made no difference. We have made our investment decision, so Siemens, together with the Association of British Ports, has put in £310m. It’s all full steam ahead.”

As Hull becomes the country’s cultural hub for the next few months, the hope is that its residents stop looking back and start looking forward.

For Professor Lee, though, until there is a complete change in the power structures that run the country, the north-south divide will remain – with or without the EU. “The way you kill nostalgia is to have something new,” he said. “The reason why people here are nostalgic is because there is nothing to replace it with.”

Felipe Araujo is a freelance journalist based in London. He writes about race, culture and sports. He covered the Rio Olympics and Paralympics on the ground for the New Statesman. He tweets @felipethejourno.