Hester's bonus decision is a victory for Ed Miliband

It was Labour's plan to hold a Commons vote that forced the RBS chief to give up his £1m bonus.

It was Labour's plan to hold a Commons vote that forced the RBS chief to give up his £1m bonus.{C}

Explaining Stephen Hester's decision to waive his £1m bonus, RBS was clear that one man was responsible: Ed Miliband. It was Miliband's plan to force a Commons vote on the issue that prompted Hester's announcement last night. As one RBS director put it to the BBC's Robert Peston, it would have been "untenable" for a semi-nationalised bank to defy the will of parliament. Miliband probably would have preferred the row to continue for another week but this is still a significant victory for him. Like his intervention over the BSkyB deal, it is further evidence of his willingness to take on "vested interests".

For the coalition, which badly mishandled the issue, Hester's decision will come as a relief. It deprives Labour of an opportunity to inflict further damage on a dithering government. But the saga doesn't end here. Most bonuses are yet to be announced and Labour's intervention sets a significant precedent. As Faisal Islam pointed out, the logic of the party's position is that no one at RBS should receive a bonus of £1m. But around a hundred bankers pocketed that amount or more in 2010. Will Labour now scrutinise RBS pay more widely? The answer from Chuka Umunna on the Today programme this morning was "yes". He argued that RBS staff "like other public sector workers" should have their pay squeezed and promised to look at salaries "across the board".

But speaking for the government, William Hague sounded a cautionary note. He warned that politicians were not qualified to comment on "individual decisions" and the "day-to-day running of the banks". Then again, pointing to David Cameron's decision to ban cash bonuses above £2,000, he declared: "if we need to do more, we will do more." With RBS now likely to remain a state-owned institution until 2015 and beyond, both Labour and the Tories will have to think hard about how they ensure its pay is seen as fair in the eyes of the public. The government has every interest in avoiding a repeat of the furore next January.

George Eaton is political editor of the New Statesman.

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Who will win in Manchester Gorton?

Will Labour lose in Manchester Gorton?

The death of Gerald Kaufman will trigger a by-election in his Manchester Gorton seat, which has been Labour-held since 1935.

Coming so soon after the disappointing results in Copeland – where the seat was lost to the Tories – and Stoke – where the party lost vote share – some overly excitable commentators are talking up the possibility of an upset in the Manchester seat.

But Gorton is very different to Stoke-on-Trent and to Copeland. The Labour lead is 56 points, compared to 16.5 points in Stoke-on-Trent and 6.5 points in Copeland. (As I’ve written before and will doubtless write again, it’s much more instructive to talk about vote share rather than vote numbers in British elections. Most of the country tends to vote in the same way even if they vote at different volumes.)

That 47 per cent of the seat's residents come from a non-white background and that the Labour party holds every council seat in the constituency only adds to the party's strong position here. 

But that doesn’t mean that there is no interest to be had in the contest at all. That the seat voted heavily to remain in the European Union – around 65 per cent according to Chris Hanretty’s estimates – will provide a glimmer of hope to the Liberal Democrats that they can finish a strong second, as they did consistently from 1992 to 2010, before slumping to fifth in 2015.

How they do in second place will inform how jittery Labour MPs with smaller majorities and a history of Liberal Democrat activity are about Labour’s embrace of Brexit.

They also have a narrow chance of becoming competitive should Labour’s selection turn acrimonious. The seat has been in special measures since 2004, which means the selection will be run by the party’s national executive committee, though several local candidates are tipped to run, with Afzal Khan,  a local MEP, and Julie Reid, a local councillor, both expected to run for the vacant seats.

It’s highly unlikely but if the selection occurs in a way that irritates the local party or provokes serious local in-fighting, you can just about see how the Liberal Democrats give everyone a surprise. But it’s about as likely as the United States men landing on Mars any time soon – plausible, but far-fetched. 

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