Bank bonuses make a mockery of the Tories' rhetoric

Payments hit £14bn despite the coalition's pledge to block "unacceptable bonuses".

We've already highlighted five stories that slipped under the radar this week as the phone hacking scandal gathered pace. Here's another one: figures from the ONS show that bank bonuses totalled £14bn this year, unchanged from the previous year and higher than the 2008-09 figure of £12 billion. Significantly, the bonus pool is now 58 per cent higher than in 2000-01. Banks and insurance companies paid 40 per cent of all bonuses despite employing only 4 per cent of the workforce.

It's further evidence of the gap between the Tories' tough rhetoric in opposition and their inaction in power. In 2009, George Osborne called for a ban on bonuses at banks that had received any sort of government guarantee. He told the Guardian:

It is totally unacceptable for bank bonuses to be paid on the back of taxpayer guarantees ... It must stop.

He later promised to block all cash bonuses over £2,000. Even the coalition agreement pledged to tackle "unacceptable bonuses in the financial services sector". But the government allowed Barclays chief executive Bob Diamond to receive a bonus of £6.5m and Stephen Hester, head of the 83 per cent state-owned RBS, to receive a bonus of £2m.

We're not all in this together

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Bank bonuses are 58 per cent higher than in 2000-1. Source:ONS

Remarkably, as Will Straw points out at Left Foot Forward, the bonuses paid out by nationalised banks exceeded those paid out to every public sector worker in the country. The public sector, which employs 22 per cent of the workforce, accounted for 1.5 per cent of all bonus payments. But the publicly owned banks, which employ just 1 per cent of the workforce, accounted for 1.6 per cent. It's yet more evidence that, contrary to George Osborne, we are not all in this together.

George Eaton is political editor of the New Statesman.

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Gerald Kaufman dies aged 86

Before becoming an MP, Kaufman's varied career included a stint as the NS' theatre critic.

Gerald Kaufman, the Labour MP for Manchester Gorton and former theatre critic at the New Statesman, has died.

Kaufman, who served as the MP for Manchester Gorton continuously from 1970, had a varied career before entering Parliament, working for the Fabian Society in addition to his flourishing career in journalism and as a satirist, writing for That Was The Week That Was and as a leader writer on the Mirror. In 1965, he exchanged the press for politics, working as a press officer and an aide to Harold Wilson before he was elected to parliament in 1970.

Upon Labour’s return to office in 1974, he served as a junior minister until the party’s defeat in 1979, and on the opposition frontbenches until 1992, reaching the position of shadow foreign secretary. In 1999, he was chair of the Man Booker Prize, which that year was won by JM Coetzee’s Disgrace.

His death opens up a by-election in Manchester Gorton, which Labour is expected to win. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.