Good bank, bad bank - what does that even mean?

Wasn't greed supposed to be "good"?

Simon Walker, the directors director, has criticised Barclays and RBS for paying their staff too much in both wages and bonuses. According to Mr Walker, who is director general of the Institute of Directors, this has caused a crisis of public confidence in capitalism.

In a candid speech about the behaviour and culture at big banks Walker said that “the proverbial turd cannot always be polished”, that the only way banks are going to look better in the eyes of the public is if they actually change instead of just pretending to.

The cause for Walker’s plea to the banks to change is the EU’s new cap on bonuses. He called it “wrong-headed and counter-productive” in that it would damage “good” and “bad” business alike.

Walker seems to have over looked the fact that these are meaningless terms when it comes to business. A “good” business is one that makes money (the more the better) not one that behaves in a moral way. Despite Google’s informal motto of “Don’t be evil”, no (big) business can (as we have seen from the search giant’s recent fines and accusations of ill-deeds).

Walker wants to encourage businesses in the UK to limit themselves, imposing caps on pay so the EU doesn’t have to come in and inflict limits on them.

He is against government action but for industry action. We should not be deceived into thinking that this is for any reasons other than selfish ones. If the EU begins imposing rules on how companies (not just the banks) are able to reward their employees for generating profits, where will it end?

From a business perspective the EU taking further measures will be disastrous in the long term and Walker is counselling UK business to recognise that they shouldn’t be greedy in the short term as they will loose out in the long term.

While he would like this to be taken as a call for a return to good business practice in the moral sense it is just a scantly veiled reminder to businesses that the money made over time, without EU rules will be far higher than the short term rewards many banks are currently doling out with both hands.

Photograph: Getty Images

Billy Bambrough writes for Retail Banker International at VRL financial news.

Photo: Getty Images
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The Fire Brigades Union reaffiliates to Labour - what does it mean?

Any union rejoining Labour will be welcomed by most in the party - but the impact on the party's internal politics will be smaller than you think.

The Fire Brigades Union (FBU) has voted to reaffiliate to the Labour party, in what is seen as a boost to Jeremy Corbyn. What does it mean for Labour’s internal politics?

Firstly, technically, the FBU has never affliated before as they are notionally part of the civil service - however, following the firefighters' strike in 2004, they decisively broke with Labour.

The main impact will be felt on the floor of Labour party conference. Although the FBU’s membership – at around 38,000 – is too small to have a material effect on the outcome of votes themselves, it will change the tenor of the motions put before party conference.

The FBU’s leadership is not only to the left of most unions in the Trades Union Congress (TUC), it is more inclined to bring motions relating to foreign affairs than other unions with similar politics (it is more internationalist in focus than, say, the PCS, another union that may affiliate due to Corbyn’s leadership). Motions on Israel/Palestine, the nuclear deterrent, and other issues, will find more support from FBU delegates than it has from other affiliated trade unions.

In terms of the balance of power between the affiliated unions themselves, the FBU’s re-entry into Labour politics is unlikely to be much of a gamechanger. Trade union positions, elected by trade union delegates at conference, are unlikely to be moved leftwards by the reaffiliation of the FBU. Unite, the GMB, Unison and Usdaw are all large enough to all-but-guarantee themselves a seat around the NEC. Community, a small centrist union, has already lost its place on the NEC in favour of the bakers’ union, which is more aligned to Tom Watson than Jeremy Corbyn.

Matt Wrack, the FBU’s General Secretary, will be a genuine ally to Corbyn and John McDonnell. Len McCluskey and Dave Prentis were both bounced into endorsing Corbyn by their executives and did so less than wholeheartedly. Tim Roache, the newly-elected General Secretary of the GMB, has publicly supported Corbyn but is seen as a more moderate voice at the TUC. Only Dave Ward of the Communication Workers’ Union, who lent staff and resources to both Corbyn’s campaign team and to the parliamentary staff of Corbyn and McDonnell, is truly on side.

The impact of reaffiliation may be felt more keenly in local parties. The FBU’s membership looks small in real terms compared Unite and Unison have memberships of over a million, while the GMB and Usdaw are around the half-a-million mark, but is much more impressive when you consider that there are just 48,000 firefighters in Britain. This may make them more likely to participate in internal elections than other affiliated trade unionists, just 60,000 of whom voted in the Labour leadership election in 2015. However, it is worth noting that it is statistically unlikely most firefighters are Corbynites - those that are will mostly have already joined themselves. The affiliation, while a morale boost for many in the Labour party, is unlikely to prove as significant to the direction of the party as the outcome of Unison’s general secretary election or the struggle for power at the top of Unite in 2018. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.