George Osborne during a visit to the Royal Mint on March 25, 2014 in Llantrisant, Wales. Photograph: Getty Images.
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Osborne's U-turn on RBS bonuses has undermined his credibility

After voting against a cap as recently as January, the Chancellor has taken fright. 

For months, George Osborne has been battling in the European court to prevent the introduction of an EU cap on bank bonuses. But today at least, he's done the reverse. Under the new rules, banks are required to limit bonuses to 100 per cent of basic salaries unless they win shareholder approval for a cap of 200 per cent. It was a loophole that RBS intended to exploit in its pay-outs to executives. But rather than allowing the bank to do so (as its opposition to the cap would suggest), the government, as RBS's majority shareholder, has vetoed the plan. 

Abandoning the pretence that UK Financial Investments, which controls the state's 81 per cent share, acts independently of ministers, a Treasury spokesman said: "Under the new strategy set out by RBS's chief executive, Ross McEwan, RBS is heading in the right direction, but it has not yet completed its restructuring and remains a majority publicly owned bank. So an increase to the bonus cap cannot be justified and the government made clear it would not have supported such a proposal. The government therefore agrees that retaining the cap at the default ratio of 1:1 and RBS's proposed pay policy is appropriate."

In other words, far from opposing the EU cap, Osborne has acted entirely in accordance with its principles. It is a double standard that Labour has been quick to pounce on, noting that ministers voted against the party's motion to impose a minimum cap on RBS just a few months ago. Shadow Treasury minister Cathy Jamieson said:  

George Osborne is in a terrible muddle over bankers' bonuses. He is spending taxpayer's money on a legal fight in Brussels against the bonus cap and yet imposing the minimum cap at RBS.

The Government has bowed to pressure on RBS and finally admitted that bonuses of two times salary would be unacceptable at what remains a Bank in Government ownership. They voted against Labour's motion to impose the minimum cap at RBS in January, but have now been forced to reverse their position.

But confusingly at the same time the Chancellor is supporting higher bonuses in Lloyds Bank and elsewhere.

People who are facing a cost-of-living crisis are rightly angry about excessive rewards for failure in banking over recent years. The Chancellor should accept the logic of today's announcement and drop his legal action to block the bonus cap.

The Treasury has sought to justify the inconsistency by arguing that the large taxpayer stake in RBS means bonuses must be restrained. A Treasury spokesman said of the differing treatment of Lloyds and RBS: "It [Lloyds] is majority private-sector owned and the government's shareholding in the bank is now down to less than a quarter. Reflecting these different circumstances, the government will use its shareholder stake to support setting the bonus cap at the maximum allowable ratio of 2:1, in line with all other majority privately owned banks." 

But as so often in the case of Osborne, this decision has more to do with politics than policy. Ministers oppose a bonus cap on the grounds that, as Andrew Bailey, the head of the Prudential Regulation Authority, has said, any limit will "just increase base pay, reduce claw back and undermine financial stability". But all of these objections apply in the case of RBS. The bank responded to the government's veto by announcing that its new CEO Ross McEwan would receive an extra £1m a year in "allowances", doubling his salary. 

The reality is that the political cost of allowing the 81 per cent-taxpayer owned RBS to pay full bonuses was simply too high for Osborne to bear. Labour would have leapt on the move as further evidence of the Tories "standing up for the wrong people" and defending the super-rich. But by choosing political opportunism over intellectual consistency, Osborne has undermined his credibility with the free-market right. 

P.S. Then again, the Chancellor has never been one for consistency. Back in 2009, he declared: "It is totally unacceptable for bank bonuses to be paid on the back of taxpayer guarantees. It must stop." 

George Eaton is political editor of the New Statesman.

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Absolutely Fashion showed what fashion week is really like: nasty, brutish and short

With fake meetings about fake covers, the documentary gave a glimpse into the abyss at the heart of the fashion world.

London Fashion Week is the sad little sister of the one in Paris, where I once attended a Valentino couture show dressed by Gap, watched what looked like live-action anorexia nervosa at Armani and got into a fight at Chanel. Did a man wearing a lion’s head on his real head look stupid? Yes, said I. No, said the fashion ­journalist, with fury.

Fashion Week had a small elegy this year – a BBC2 documentary called Absolutely Fashion: Inside British Vogue, which was fantastically misnamed. There is nothing inside Vogue, except a vague groping for novelty, which is technically an abyss. But that did not stop the programme’s director, Richard Macer, from sitting in Vogue House for nine months, watching women smell each other’s mascara. In the way of a certain type of media, he seems to have emerged more ignorant than when he began. This is the central principle of fashion: stupefy the buyer and she will pay to be reborn as something uglier.

“He doesn’t understand fashion,” said one critic, which I think meant: “He should have licked Karl Lagerfeld’s shoes while crying about belts.” To this critic, that is understanding fashion. It is a religious hierarchy. (That no one has asked Lagerfeld what he has done to his face, and why, proves this. When I met Lagerfeld in Paris, he was behind a velvet rope. I wondered if he sleeps with it.) Macer is a sexist, suggested another critic, who seemed to think that any industry that employs women in large numbers – human surrogacy farms, for instance, or Bangladeshi textile factories, or German super-brothels – is feminist. This is the stupidest definition of feminism I have yet heard and I have fashion to thank for it.

Macer was too frightened to ask questions about exploitation, pollution or the haunting spectacle of malnourished adolescents inciting self-hatred in older females in pursuit of profit, and he is not alone. I read no insights about London Fashion Week, but I do not care about clothes. He was so cowed by his access as to be undeserving of it, and Absolutely Fashion was as much about the laziness and commercial imperatives of modern journalism as it was about fashion, from which we should expect nothing.

Macer had a tiny scoop: British Vogue learned that American Vogue was running a cover of the singer Rihanna in the same calendar month. It decided to run early and people stayed up all night anxiously repaginating. He had the opportunity to ask Anna Wintour, the editor-in-chief of the US magazine, about it, but a staffer begged him not to. So he didn’t. He segued from journalist to PR. He drank the opiate – and I understand this, because if you don’t, you won’t survive. “Come again,” Jean Paul Gaultier once told me in Paris. His meaning was: “. . . but only if you love my clothes”.

In one scene, the actor Hugh Jackman was photographed in a bathtub at Claridge’s Hotel in London. He was fully clothed and looked marginally more stupid than he does dressed as the genetically mutated wolf man Wolverine, but that is not the point. “Come and see how handsome you are, Hugh,” cooed a Vogue woman. I wouldn’t have minded Jackman preening over an image of himself in private, but this exposed a truth: some journalism is celebrity PR.

Elsewhere, Kate Moss did a shoot wearing clothes that belonged to the Rolling Stones. It was based, she said, on a well-known shoot that they once did “in exile”. She meant tax exile, which was funny.

That Vogue, which is still, at least nominally, a magazine, should devote itself to this junk is not excused by an intellectual curiosity so dulled that one executive said that New York Fashion Week had “a sort of Lego element to it”.

British Vogue is edited by Alexandra Shulman, and in the manner of print media with long-standing editors – she has been there for 24 years – it is, in essence, a cult. In this case, a passive-aggressive-ocracy. (People are always surprised to learn that magazines are tyrannies, but there it is.)

I do not know whether Shulman wanted Macer there or not, or whether she didn’t have the clout to stop it, but once he was in, she treated him with the bored derision of a woman contemplating a ball gown chewed by moths. Shulman has the face of a woman who should get out while she can. In her only revealing scene, she had to choose between two front covers. One was “artistic” because it showed Kate Moss’s knickers; the other was unthreatening because it showed only Kate Moss’s face. “My heart is never allowed to rule,” she said, and she laughed. But I think she meant it.

She lied to Macer, too, holding fake meetings about fake covers so the world would not learn that Vogue had, by its cracked standards, a huge scoop: the Duchess of Cambridge would appear on the cover of the 100th-anniversary issue in a hat.

Absolutely Fashion also taught us, had we not known, that fashion is peopled by privileged creatures who are impervious to the extent of their privilege and who are, therefore, bad journalists, because they cannot even effectively interview themselves. For instance, the photographer Mary McCartney, one of Paul’s daughters, told Macer that she had never got work because her father was a member of the Beatles.

To be oblivious to reality is essential in fashion. Everyone is equal under the skirt. Yet McCartney flourishes because of the doctrine of the age: the already prosperous are more worthy of prosperity.

Not everyone seemed so disingenuous. One woman described the search for the non-existent novelty as “exhausting”. She no longer believed in the cult.

Absolutely Fashion, if you watch it critically, is more interesting than Macer perhaps allowed himself to dream. In its way, it embodied any fashion week anywhere: nasty, brutish and short. 

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