The Treasury gets £200m for Christmas

Let's hope it doesn't spend it all in one place.

The Treasury is set to receive a spectacular belated Christmas present this year: over £200m in banking fines. Under new regulation introduced last October, the money raised from punishing banks’ misdemeanours, of which there were many in 2012, will not go to the FSA, but to the Treasury. Hopefully, this move will not encourage the government to hand out fines indiscriminately solely for the purpose of boosting its balance sheet.

At present, the debris-strewn financial landscape of 2012 is set to benefit the Treasury to the tune of £312m. But before the end of the financial year in April, this figure is likely to be much higher, with RBS expected to settle over Libor by paying a fine of about £350m.

What is the government going to do with this money, which comes on top of the annual banking levy of £2.5bn? So far, it has promised to hand £35m to armed forces charities; once the FSA’s investigation fees are deducted, around £172m will be left. After it receives its chunk of RBS’s fine, the final figure for the Treasury will far exceed £200m.

Financial iniquity, it would seem, now means profit for the government. At the end of last year, I argued that fines are not an effective way in which to punish banks and bankers for immorality or incompetence. The danger of handing the money they raise to the Treasury rather than an independent regulator is that the government might be less inclined to look at other ways of addressing the City’s misdemeanours.

This article first appeared in Spear's magazine.

The money has been raised from punishing banks’ misdemeanours. Photograph: Getty Images

Mark Nayler is a senior researcher at Spear's magazine.

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Jeremy Corbyn's Labour conference speech shows how he's grown

The leader's confident address will have impressed even his fiercest foes. 

It is not just Jeremy Corbyn’s mandate that has been improved by his re-election. The Labour leader’s conference speech was, by some distance, the best he has delivered. He spoke with far greater confidence, clarity and energy than previously. From its self-deprecating opening onwards ("Virgin Trains assure me there are 800 empty seats") we saw a leader improved in almost every respect. 

Even Corbyn’s firecest foes will have found less to take issue with than they may have anticipated. He avoided picking a fight on Trident (unlike last year), delivered his most forceful condemnation of anti-Semitism (“an evil”) and, with the exception of the Iraq war, avoided attacks on New Labour’s record. The video which preceded his arrival, and highlighted achievements from the Blair-Brown years, was another olive branch. But deselection, which Corbyn again refused to denounce, will remain a running sore (MPs alleged that Hillsborough campaigner Sheila Coleman, who introduced Corbyn, is seeking to deselect Louise Ellman and backed the rival TUSC last May).

Corbyn is frequently charged with lacking policies. But his lengthy address contained several new ones: the removal of the cap on council borrowing (allowing an extra 60,000 houses to be built), a ban on arms sales to abusive regimes and an arts pupil premium in every primary school.

On policy, Corbyn frequently resembles Ed Miliband in his more radical moments, unrestrained by Ed Balls and other shadow cabinet members. He promised £500bn of infrastructure investment (spread over a decade with £150bn from the private sector), “a real living wage”, the renationalisation of the railways, rent controls and a ban on zero-hours contracts.

Labour’s greatest divisions are not over policy but rules, strategy and culture. Corbyn’s opponents will charge him with doing far too little to appeal to the unconverted - Conservative voters most of all. But he spoke with greater conviction than before of preparing for a general election (acknowledging that Labour faced an arithmetical “mountain”) and successfully delivered the attack lines he has often shunned.

“Even Theresa May gets it, that people want change,” he said. “That’s why she stood on the steps of Downing Street and talked about the inequalities and burning injustices in today’s Britain. She promised a country: ‘that works not for a privileged few but for every one of us’. But even if she manages to talk the talk, she can’t walk the walk. This isn’t a new government, it’s David Cameron’s government repackaged with progressive slogans but with a new harsh right-wing edge, taking the country backwards and dithering before the historic challenges of Brexit.”

After a second landslide victory, Corbyn is, for now, unassailable. Many MPs, having voted no confidence in him, will never serve on the frontbench. But an increasing number, recognising Corbyn’s immovability, speak once again of seeking to “make it work”. For all the ructions of this summer, Corbyn’s speech will have helped to persuade them that they can.

George Eaton is political editor of the New Statesman.