Why Bob Diamond's bonus is a legitimate target

Don't believe he 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". Barclays chief Bob Diamond won't comment on the size of his bonus but it's thought to be in the region of £3m.

It was Diamond who famously told MPs last year that the time for "remorse and apology" was over but, as you may have noticed, not everyone agrees. In response, we can expect Barclays, which announced profits of £5.9bn this morning, 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 bank's former chief executive, 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.

"It is totally unacceptable for bank bonuses to be paid on the back of taxpayer guarantees . . . it must stop," he said in August 2009.

The response from the PM's spokesman today? "It is not for me to comment on pay deals for individuals at private-sector companies." Under pressure from the right of his party, which accuses him of joining an anti-business witch hunt, Cameron has refused to join the fray.

Conversely, Ed Miliband has widened his attack on bankers' pay to include Barclays and other non state-owned banks. In a speech last night, he declared: "Some argue that it is no business of the public what bonuses banks pay. I fundamentally disagree. Because even banks which are not publicly owned implicitly benefit from a taxpayer guarantee, to the tune of billions of pounds."

The challenge for Labour is to ensure it reaps some political benefit from this new dividing line.

George Eaton is political editor of the New Statesman.

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The Brexit ministers who just realised reducing immigration is a problem for them

Turns out there's a teeny tiny hiccup with reducing immigration...

On 27 December 2015, the then-backbencher MP David Davis declared he was "voting out" in the forthcoming EU referendum. Among his reasons was the "disastrous migration crisis". 

Fast forward 14 months. Now the minister responsible for Brexit, Davis has been spotted in the Latvian capital of Riga, with a slightly different message

He admitted it was not plausible that Brits would immediately take jobs in the kind of low-paid sectors like agriculture and social care currently staffed by migrant workers. 

Immigration restrictions "will take years" to be phased in, he added. 

Davis is only the latest minister in the Brexit government to realise that immigration might be down to more than some pesky EU bureaucrats. Here's when the penny dropped for the others: 

Andrea "Seasonal Labour"  Leadsom

During the EU referendum campaign, Brexit charmer-in-chief Andrea Leadsom told The Guardian that immigration from EU countries could “overwhelm” Britain, and that her constituents complained about not hearing English spoken on the street. 

But speaking to farmers in 2017 as Environment secretary, Leadsom said she knew “how important seasonal labour from the EU is, to the everyday running of your businesses”. She said she was committed to making sure farmers “have the right people with the right skills”. 

Sajid “Bob the Builder” Javid 

The Communities secretary Sajid Javid backed the Remain campaign like his mentor George Osborne, but when he was offered a job in the Brexit government, he took it.

Javid has criticised immigrants who don’t integrate, but it seems there is one group he doesn’t have any qualms about - the construction workers who build the homes that fall under his remit.

As early as September, Javid was telling the FT he wouldn’t let any pesky UK border red tape get between him and foreign workers needed to meet his housebuilding targets.

Philip “Citizen of the World” Hammond

So if you can’t kick out builders, what about that perennially unpopular group of workers, bankers? Not so fast, says Philip Hammond.

Just three months after Brexit, he said the government would use immigration controls “in a sensible way that will facilitate the movement of highly-skilled people between financial institutions and businesses”. 

As a Chancellor who personally backed Remain, Hammond is painfully aware of the repercussions if the City decamps to the Continent. 

Greg “Brightest and Best” Clark

The Business, Energy and Industrial Strategy secretary backed Remain, and has kept his head down since winning the meaty new industrial brief. 

Nevertheless, he seems willing to weigh in on the immigration cap debate, at least on behalf of international students. Asked whether the post-study work visa pilot should continue, Clark said the government wanted to attract the brightest and best.

He continued:

"We have visa arrangements in place so that people can work in graduate jobs after that, and it is important that they should be able to do so."

Jeremy "The Doctor" Hunt 

The Health secretary kept his job in the turmoil of the summer, and used his conference speech to toe the party line with a pledge that the NHS would rely on less foreign medical staff in future.

The problem is, Hunt has alienated junior doctors by imposing an unpopular contract, and even those wannabe medics that do sign up will have to undergo half a decade of studying first.

Asked about where he plans to find NHS workers in Parliament, Hunt declared: “No one from either side of the Brexit debate has ever said there will be no immigration post-Brexit.” He also remained “confident” that the UK would be able to negotiate a deal that allowed the 127,000 EU citizens working for the NHS to stay. 

So it turns out we might need agriculture and construction workers, plus students, medics and even bankers after all. It's a good thing the government already has a Brexit plan sorted out...
 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.