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.
 

How Jim Murphy's mistake cost Labour - and helped make Ruth Davidson

Scottish Labour's former leader's great mistake was to run away from Labour's Scottish referendum, not on it.

The strange revival of Conservative Scotland? Another poll from north of the border, this time from the Times and YouGov, shows the Tories experiencing a revival in Scotland, up to 28 per cent of the vote, enough to net seven extra seats from the SNP.

Adding to the Nationalists’ misery, according to the same poll, they would lose East Dunbartonshire to the Liberal Democrats, reducing their strength in the Commons to a still-formidable 47 seats.

It could be worse than the polls suggest, however. In the elections to the Scottish Parliament last year, parties which backed a No vote in the referendum did better in the first-past-the-post seats than the polls would have suggested – thanks to tactical voting by No voters, who backed whichever party had the best chance of beating the SNP.

The strategic insight of Ruth Davidson, the Conservative leader in Scotland, was to to recast her party as the loudest defender of the Union between Scotland and the rest of the United Kingdom. She has absorbed large chunks of that vote from the Liberal Democrats and Labour, but, paradoxically, at the Holyrood elections at least, the “Unionist coalition” she assembled helped those parties even though it cost the vote share.

The big thing to watch is not just where the parties of the Union make gains, but where they successfully form strong second-places against whoever the strongest pro-Union party is.

Davidson’s popularity and eye for a good photo opportunity – which came first is an interesting question – mean that the natural benefactor in most places will likely be the Tories.

But it could have been very different. The first politician to hit successfully upon the “last defender of the Union” routine was Ian Murray, the last Labour MP in Scotland, who squeezed both the  Liberal Democrat and Conservative vote in his seat of Edinburgh South.

His then-leader in Scotland, Jim Murphy, had a different idea. He fought the election in 2015 to the SNP’s left, with the slogan of “Whether you’re Yes, or No, the Tories have got to go”.  There were a couple of problems with that approach, as one  former staffer put it: “Firstly, the SNP weren’t going to put the Tories in, and everyone knew it. Secondly, no-one but us wanted to move on [from the referendum]”.

Then again under different leadership, this time under Kezia Dugdale, Scottish Labour once again fought a campaign explicitly to the left of the SNP, promising to increase taxation to blunt cuts devolved from Westminster, and an agnostic position on the referendum. Dugdale said she’d be open to voting to leave the United Kingdom if Britain left the European Union. Senior Scottish Labour figures flirted with the idea that the party might be neutral in a forthcoming election. Once again, the party tried to move on – but no-one else wanted to move on.

How different things might be if instead of running away from their referendum campaign, Jim Murphy had run towards it in 2015. 

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

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