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

Getty
Show Hide image

Expressions of sympathy for terror's victims may seem banal, but it's better than the alternative

Angry calls for "something to be done" play into terrorists' hands.

No sooner had we heard of the dreadful Manchester Arena bombing and before either the identity of the bomber or the number of dead were known, cries of “something must be done” echoed across social media and the airwaves. Katie Hopkins, the Mail Online columnist, called for “a final solution”, a tweet that was rapidly deleted, presumably after she remembered (or somebody explained to her) its connotations. The Telegraph columnist Allison Pearson wanted “a State of Emergency as France has” and “internment of thousands of terror suspects”, apparently unaware that the Nice attack, killing 86, happened after that emergency was declared and that nobody has been interned anyway.

It cannot be said too often that such responses play into terrorists’ hands, particularly if Isis was behind the Manchester bombing. The group’s aim is to convince Muslims in the West that they and their families cannot live in peace with the in-fidel and will be safe only if they join the group in establishing a caliphate. Journalists, striving for effect, often want to go beyond ­banal expressions of sympathy for ­victims. (It’s a mistake I, too, have sometimes made.) But occasionally the banal is the appropriate response.

Pity begins at home

Mark Twain, writing about the “terror” that followed the French Revolution and brought “the horror of swift death”, observed that there was another, older and more widespread, terror that brought “lifelong death from hunger, cold, insult, cruelty and heartbreak”. The first, he wrote, we had been “diligently taught to shiver and mourn over”; the other we had never learned to see “in its vastness or pity as it deserves”.

That is true: more children across the world die each day from hunger or disease than could ever be killed in a terror attack. We should not forget them. Nor should we forget that the numbers killed in terrorist attacks in, for example, Baghdad far outnumber those killed in all European attacks of our times combined. In an age of globalisation, we should be more cosmopolitan in our sympathies but the immediacy of 24-hour news make us less so.

When all is said and done, however, pity, like charity, begins at home. We naturally grieve most over those with whom we share a country and a way of life. Most of us have been to concerts and some readers will have been to one at the Manchester Arena. We or our children could have been present.

Cheers from Highgate Cemetery

What a shame that Theresa May modified the Tory manifesto’s proposals on social care. For a few giddy days, she was proposing the most steeply progressive (or confiscatory, as the Tories would normally say) tax in history. True, it was only for those unfortunate enough to suffer conditions such as dementia, but the principle is what counts. It would have started at zero for those with assets of less than £100,000, 20 per cent for those with £120,000, 50 per cent for those worth £200,000, 99 per cent with those with £10m and so on, ad infinitum. Karl Marx would have been cheering from Highgate Cemetery.

Given that most people’s main asset – the value of their home – did not have to be sold to meet their care costs until death, this was in effect an inheritance tax. It had tantalising implications: to secure their inheritance, children of the rich would have had to care for their parents, possibly sacrificing careers and risking downward mobility, while the children of the poor could have dedicated themselves to seeking upward mobility.

The Tories historically favour, in John Major’s words, wealth cascading down the generations. In recent years they have all but abolished inheritance tax. Now they have unwittingly (or perhaps wittingly, who knows?) conceded that what they previously branded a “death tax” has some legitimacy. Labour, which proposes a National Care Service but optimistically expects “cross-party consensus” on how to finance it, should now offer the clarity about old age that many voters crave. Inheritance tax should be earmarked for the care service, which would be free at the point of use, and it should be levied on all estates worth (say) £100,000 at progressive rates (not rising above even 50 per cent, never mind 99 per cent) that yield sufficient money to fund it adequately.

Paul Dacre’s new darling

Paul Dacre, the Daily Mail editor, is in love again. “At last, a PM not afraid to be honest with you,” proclaimed the paper’s front page on Theresa May’s manifesto. Though the Mail has previously argued that to make old people use housing wealth to fund care is comparable to the slaughter of the first-born, an editorial said that her honesty was exemplified by the social care proposals.

On the morning of the very day that May U-turned, the Mail columnist Dominic Lawson offered a convoluted defence of the failure to cap what people might pay. Next day, with a cap announced, the Mail hailed “a PM who’s listening”.

Dacre was previously in love with Gordon Brown, though not to the extent of recommending a vote for him. What do Brown and May have in common? Patriotism, moral values, awkward social manners, lack of metropolitan glitz and, perhaps above all, no evident sense of humour. Those are the qualities that win Paul Dacre’s heart.

Sobering up

Much excitement in the Wilby household about opinion polls that show Labour reducing the Tories’ enormous lead to, according to YouGov, “only” 9 percentage points. I find myself babbling about ­“Labour’s lead”. “What are you talking about?” my wife asks. When I come to my senses, I realise that my pleasure at the prospect, after seven years of Tory austerity, of limiting the Tories’ majority to 46 – more than Margaret Thatcher got in 1979 – is a measure of my sadly diminished expectations. l

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article first appeared in the 25 May 2017 issue of the New Statesman, Why Islamic State targets Britain

0800 7318496