Bob Diamond's £6.5m bonus shows little “restraint”

Don’t believe the myth that Barclays didn’t benefit from state support.

It's payday for the man Peter Mandelson once described as the "unacceptable face of banking". Sky News's Mark Kleinman reveals that the Barclays boss Bob Diamond has been awarded a bonus of £6.5m for 2010. In a risible attempt to demonstrate "restraint", £1.8m of the bonus will be paid in shares and £4.7m in "deferred incentives". But the payout still makes Diamond the best-paid boss of the four big high-street banks.

In response, we can expect Barclays to remind us that it did not receive a pound of taxpayers' money. Yet this seemingly plausible defence does not bear scrutiny. Though it was not bailed out by the state, Barclays benefited immensely from the emergency measures introduced by the government to prevent a sector-wide collapse.

As John Varley, the former chief executive at Barclays, conceded in 2009:

There are two ways I would say the system as a whole benefited generically.

One was in the injection of liquidity undertaken by the Bank of England and a new structure put in place in March 2008.

And the other was the making available of guarantees from government for funding undertaken by banks. It is important to recognise that in each case the banks were encouraged to use these new structures that were put in place and we did.

It is also important to recognise that we were required and we did pay a price for these things, but I'm not trivialising the importance of the intervention. It was important.

Without the state-led bailout of RBS and Lloyds-HBOS, there would have been a run on all the banks, including Barclays. It was for this reason that George Osborne, while shadow chancellor, called for a ban on bonuses at banks that had received any sort of government guarantee.

As he said at the time: "It is totally unacceptable for bank bonuses to be paid on the back of taxpayer guarantees . . . it must stop." Having utterly failed to live up to this pledge, Osborne now insists that it's time to move from "retribution to recovery". But as Mervyn King pointed out at the weekend, few share this view.

Last month, Vince Cable rightly denounced the decision to award the RBS chief executive, Stephen Hester, a bonus of £2m as "offensive". Will the coalition's conscience speak out today?

George Eaton is political editor of the New Statesman.

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Andy Burnham quits shadow cabinet: "Let's end divisive talk of deselections"

The shadow home secretary reflected on a "profoundly sad" year. 

Andy Burnham will leave the shadow cabinet in the reshuffle to focus on his bid to become Manchester's metro mayor in 2017. 

In his swansong as shadow home secretary, Burnham said serving Labour had been a privilege but certain moments over the last 12 months had made him "profoundly sad".

He said:

"This is my tenth Conference speaking to you as a Cabinet or shadow cabinet minister.

"And it will be my last.

"It is time for me to turn my full focus to Greater Manchester. 

"That's why I can tell you all first today that I have asked Jeremy to plan a new shadow cabinet without me, although I will of course stay until it is in place."

Burnham devoted a large part of his speech to reflecting on the Hillsborough campaign, in which he played a major part, and the more recent campaign to find out the truth of the clash between police and miners at Orgreave in 1984.

He defended his record in the party, saying he had not inconsistent, but loyal to each Labour leader in turn. 

Burnham ran in the 2015 Labour leadership election as a soft left candidate, but found himself outflanked by Jeremy Corbyn on the left. 

He was one of the few shadow cabinet ministers not to resign in the wake of Brexit.

Burnham spoke of his sadness over the turbulent last year: He was, he said:

"Sad to hear the achievements of our Labour Government, in which I was proud to serve, being dismissed as if they were nothing.

"Sad that old friendships have been strained; 

"Sad that some seem to prefer fighting each other than the Tories."

He called for Labour to unite and end "divisive talk about deselections" while respecting the democratic will of members.

On the controversial debate of Brexit, and controls on immigration, he criticised Theresa May for her uncompromising stance, and he described Britain during the refugee crisis as appearing to be "wrapped up in its own selfish little world".

But he added that voters do not want the status quo:

"Labour voters in constituencies like mine are not narrow-minded, nor xenophobic, as some would say. 

"They are warm and giving. Their parents and grandparents welcomed thousands of Ukrainians and Poles to Leigh after the Second World War.

"And today they continue to welcome refugees from all over the world. They have no problem with people coming here to work.

"But they do have a problem with people taking them for granted and with unlimited, unfunded, unskilled migration which damages their own living standards. 

"And they have an even bigger problem with an out-of-touch elite who don't seem to care about it."

Burnham has summed up Labour's immigration dilemma with more nuance and sensitivity than many of his colleagues. But perhaps it is easier to do so when you're leaving your job.