The NS Interview: John Varley

“If you’ve got thin skin, you shouldn’t run a bank” - John Varley, chief executive of Barclays

How do people react when you tell them you're a banker?
Not a lot of spontaneous applause.

Do you like being a banker?
Yes, I do. I like leading a big organisation, knowing that what we do, if we do it well, makes a difference to the 50 million customers we serve.

Have you had threats or abuse from members of the public during the financial crisis?
Yes, but that goes with the turf. If you've got thin skin, you shouldn't be the chief executive of a listed company, still less of a bank.

Do you believe bank bosses have anything to apologise to the British public for?
I've said in public many times during the past three years there is much to be sorry about. There have been many players in this drama, but it's clear that the banking industry got a lot of things wrong. As a chief executive of a big bank, I acknowledge that and am grateful that governments, through the injection of taxpayers' money, rescued the global banking system.

Why do you reject the proposal to split retail banking from riskier investment banking?
I don't think that the size of a bank is a good indicator of its riskiness. Nor do I think that combinations of activity, by definition, create risk - they very often diversify risk. At the heart of our ability to generate profits for our shareholders is the diversity of our business portfolio, which creates advantages for customers and shareholders alike.

Big, sophisticated banks can help society tackle some of the biggest issues that confront it - like the privatisation of welfare provision, the funding of health-care programmes, the development of infrastructure and even the tackling of carbon emissions. I don't believe legis­lation that was regarded as fit for purpose in the 1930s to deal with a very different economic crisis would be helpful to the world as it emerges from this crisis in 2010.

Do you understand why people are so upset about bankers' pay and bonuses?
I have to be sensitive to what the public thinks, because a lot of taxpayers' money has been put to work in the banking system. And if the pay of nurses and teachers is frozen because of the economic crisis, then the public is going to look carefully at what bankers get paid. Last year, Barclays profits were down 16 per cent, but total compensation was down about 50 per cent. That's an indication that we are sensitive to this subject. But pay judgements are difficult. I am obliged, as chief executive, to field the very best people I can by paying fairly. But be clear - we're seeking to pay the minimum consistent with remaining competitive.

Will the bonus tax really drive talented bankers abroad? Isn't that just scaremongering?
The banking industry is increasingly global. Talent is mobile. So if the best talent feels compromised by an unlevel playing field, then, yes, it will go. And it will not be good for the economy if talented people conclude they're better located in Madrid, New York, or Singapore.

Will Barclays be paying out a multibillion-pound bonus pot in 2010? Or will you defer it?
When we make our decisions about bonuses for 2009 - and we've not made them yet - three things will guide us. First, how we've performed during the year: we have a pay-for-performance culture. Second, we must pay in a way that serves the interests of our shareholders. Third, we must comply fully with the new FSA code on compensation. As we have done in the past, but more so, a lot of the compensation of senior executives will be deferred, with the objective of further aligning their interests with the interests of our owners.

Do you think the public will ever regain respect for banks (and bankers)?
Banks and bankers must show humility and acknowledge what's happened. That said, they've got to be good at what they do. If the global economy is going to grow, then that has to be facilitated by banks doing their job well. If banks are successful, they invest in business; they lend; they employ a lot of people; they pay dividends; they pay tax. Society benefits as a result. I don't expect these things to be much recognised in this environment. But in time they will be recognised again.

What would you like to forget?
There are a few days over the past three years that I would like to forget.

Has this recession harmed you personally?
If you're a shareholder in a bank, as I am, the experience has been a bad one over the past three years. So of course I've suffered economically.

Are we all doomed?
I'm looking out of my office window in our building in Canary Wharf. Below me there's a skating rink. Some of the skaters are skating elegantly, some tentatively, but they're all getting round the rink. That's how we all are, really. We're not doomed! We're getting round the rink.


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Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

This article first appeared in the 11 January 2010 issue of the New Statesman, Obama: the year of living dangerously

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The New Times: Brexit, globalisation, the crisis in Labour and the future of the left

With essays by David Miliband, Paul Mason, John Harris, Lisa Nandy, Vince Cable and more.

Once again the “new times” are associated with the ascendancy of the right. The financial crash of 2007-2008 – and the Great Recession and sovereign debt crises that were a consequence of it – were meant to have marked the end of an era of runaway “turbocapitalism”. It never came close to happening. The crash was a crisis of capitalism but not the crisis of capitalism. As Lenin observed, there is “no such thing as an absolutely hopeless situation” for capitalism, and so we discovered again. Instead, the greatest burden of the period of fiscal retrenchment that followed the crash was carried by the poorest in society, those most directly affected by austerity, and this in turn has contributed to a deepening distrust of elites and a wider crisis of governance.

Where are we now and in which direction are we heading?

Some of the contributors to this special issue believe that we have reached the end of the “neoliberal” era. I am more sceptical. In any event, the end of neoliberalism, however you define it, will not lead to a social-democratic revival: it looks as if, in many Western countries, we are entering an age in which centre-left parties cannot form ruling majorities, having leaked support to nationalists, populists and more radical alternatives.

Certainly the British Labour Party, riven by a war between its parliamentary representatives and much of its membership, is in a critical condition. At the same time, Jeremy Corbyn’s leadership has inspired a remarkable re-engagement with left-wing politics, even as his party slumps in the polls. His own views may seem frozen in time, but hundreds of thousands of people, many of them young graduates, have responded to his anti-austerity rhetoric, his candour and his shambolic, unspun style.

The EU referendum, in which as much as one-third of Labour supporters voted for Brexit, exposed another chasm in Labour – this time between educated metropolitan liberals and the more socially conservative white working class on whose loyalty the party has long depended. This no longer looks like a viable election-winning coalition, especially after the collapse of Labour in Scotland and the concomitant rise of nationalism in England.

In Marxism Today’s “New Times” issue of October 1988, Stuart Hall wrote: “The left seems not just displaced by Thatcherism, but disabled, flattened, becalmed by the very prospect of change; afraid of rooting itself in ‘the new’ and unable to make the leap of imagination required to engage the future.” Something similar could be said of the left today as it confronts Brexit, the disunities within the United Kingdom, and, in Theresa May, a prime minister who has indicated that she might be prepared to break with the orthodoxies of the past three decades.

The Labour leadership contest between Corbyn and Owen Smith was largely an exercise in nostalgia, both candidates seeking to revive policies that defined an era of mass production and working-class solidarity when Labour was strong. On matters such as immigration, digital disruption, the new gig economy or the power of networks, they had little to say. They proposed a politics of opposition – against austerity, against grammar schools. But what were they for? Neither man seemed capable of embracing the “leading edge of change” or of making the imaginative leap necessary to engage the future.

So is there a politics of the left that will allow us to ride with the currents of these turbulent “new times” and thus shape rather than be flattened by them? Over the next 34 pages 18 writers, offering many perspectives, attempt to answer this and related questions as they analyse the forces shaping a world in which power is shifting to the East, wars rage unchecked in the Middle East, refugees drown en masse in the Mediterranean, technology is outstripping our capacity to understand it, and globalisation begins to fragment.

— Jason Cowley, Editor 

Tom Kibasi on what the left fails to see

Philip Collins on why it's time for Labour to end its crisis

John Harris on why Labour is losing its heartland

Lisa Nandy on how Labour has been halted and hollowed out

David Runciman on networks and the digital revolution

John Gray on why the right, not the left, has grasped the new times

Mariana Mazzucato on why it's time for progressives to rethink capitalism

Robert Ford on why the left must reckon with the anger of those left behind

Ros Wynne-Jones on the people who need a Labour government most

Gary Gerstle on Corbyn, Sanders and the populist surge

Nick Pearce on why the left is haunted by the ghosts of the 1930s

Paul Mason on why the left must be ready to cause a commotion

Neal Lawson on what the new, 21st-century left needs now

Charles Leadbeater explains why we are all existentialists now

John Bew mourns the lost left

Marc Stears on why democracy is a long, hard, slow business

Vince Cable on how a financial crisis empowered the right

David Miliband on why the left needs to move forward, not back

This article first appeared in the 22 September 2016 issue of the New Statesman, The New Times