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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Quiz: Can you identify fake news?

The furore around "fake" news shows no sign of abating. Can you spot what's real and what's not?

Hillary Clinton has spoken out today to warn about the fake news epidemic sweeping the world. Clinton went as far as to say that "lives are at risk" from fake news, the day after Pope Francis compared reading fake news to eating poop. (Side note: with real news like that, who needs the fake stuff?)

The sweeping distrust in fake news has caused some confusion, however, as many are unsure about how to actually tell the reals and the fakes apart. Short from seeing whether the logo will scratch off and asking the man from the market where he got it from, how can you really identify fake news? Take our test to see whether you have all the answers.

 

 

In all seriousness, many claim that identifying fake news is a simple matter of checking the source and disbelieving anything "too good to be true". Unfortunately, however, fake news outlets post real stories too, and real news outlets often slip up and publish the fakes. Use fact-checking websites like Snopes to really get to the bottom of a story, and always do a quick Google before you share anything. 

Amelia Tait is a technology and digital culture writer at the New Statesman.