George Osborne talks to the press as he arrives for an economic and financial affairs meeting (Ecofin) in Brussels on November 7, 2014. Photograph: Getty Images.
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Osborne drops legal challenge to EU bank bonus cap

With attention on the Rochester by-election, the Chancellor makes his retreat.

Under the cover of the Rochester by-election, George Osborne has abandoned his long-running legal challenge to the EU's cap on bank bonuses. The decisive blow came earlier today when an advocate general at the European Court of Justice advised that the new law, which restricts payouts to 100 per cent of a bankers’ salary, or 200 per cent with shareholder approval, should be upheld. 

Osborne said: "I’m not going to spend taxpayers’ money on a legal challenge now unlikely to succeed. The fact remains these are badly designed rules that are pushing up bankers’ pay not reducing it. These rules may be legal but they are entirely self-defeating, so we need to find another way to end rewards for failure in our banks."

Ed Balls has been swift to respond, deriding the move as "a humiliating climbdown". He said: "The Chancellor revealed his true priorities when he decided a year ago to spend taxpayers’ money fighting a bank bonus cap while working families face a cost-of-living crisis. He should tell taxpayers how much money he has now wasted on this challenge, which we warned him against.

"It shouldn’t have taken the EU to act to rein in excessive bonuses, but George Osborne has totally failed to act here in Britain.

"Labour will reform the banks and levy a tax on bank bonuses to fund a paid starter job for young people out of work for over a year."

The cap has been criticised by left-wing economists on the grounds that it simply allows banks to inflate employees' basic pay (which is not subject to claw-back) and does little to tackle the underlying causes of excessive risk-taking. But the politics of this debate are too exquisite for Labour to get caught in technicalities. Expect it to swiftly FOI the Treasury to find out just how much of the public's money Osborne spent on his doomed challenge. 

Meanwhile, it's worth noting that forced to side with either the EU or the City of London, Nigel Farage has sided with the City. He told the Evening Standard: "A lot of people in Rochester and Strood commute to London to work in the finance industry. They will be reading about this in the Evening Standard on their way home and may well feel dismayed by the verdict.

"It is the constant drip, drip, drip of Britain losing every single negotiation and ruling. We never win and it’s time we woke up to that fact."

The former trader added: "If you applied this law to the Premier League you would not expect Britain to remain one of the world’s greatest footballing nations. London is the world’s greatest centre for a lot of industries, including finance."

Farage's stance is consistent with his europhobia and his free market principles. But it is unlikely to go down well with Ukip voters, who, as polls have consistently shown, lean to the left on economic issues. 

George Eaton is political editor of the New Statesman.

Photo: Getty
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The beggar used to be friendly – now he was ranting at everyone

What was I doing, dismissing him with maximal curtness – and not caring?

The first beggar was walking but still wretched. Probably in his early twenties, clearly ravaged by more than just alcohol, he made a beeline for me, as if he had an appointment. He was not to know that I was in a mood from hell, though the look on my face would have told him, if he’d been in any kind of state to register it.

“Excuse me, have you got 10p for…”

“No.” And I walked on.

Why? I am almost invariably a soft touch for this kind of thing. But as I said, I was in the foulest of tempers.

Also, this was East Finchley. For those who do not know London, East Finchley is a northern suburb, which at one end hosts the wealthiest street in the country – the Bishops Avenue, where multimillionaires tear down houses and erect new ones even uglier than those they have replaced – and at the other end a typically seedy, dull collection of terraced houses.

The main supermarket is Budgens, a name so ungainly that it could only have belonged to a real person, either too proud or unimaginative to think of something else.

But what, I asked myself, was someone this wretched doing in East Finchley? And what was I doing, dismissing him with maximal curtness – and not caring?

The second beggar, further up the street, I met the next day: much older and clearly mad, rather than chemically poisoned. He asked how I was doing.

“Not so well, as it happens,” I replied.

“Would you like me to say a prayer for you?”

“Why not?” I said, and he placed a clenched fist to my forehead and made a brief incantation, something like an exorcism, and then kissed the large white plastic crucifix hanging from his neck.

I half-expected to feel a jolt of faith, some kind of divine restructuring. This time I gave him money: a pound coin and a 50p coin. But then later I thought: why didn’t I give him more? I’d been doing some tidying earlier and had retrieved a heavy pocketful of change; I could have given him a generous handful.

The third beggar was in Shepherd’s Bush. I knew him from the days when I lived there: a skinny, middle-aged guy who would occasionally stop and rant in a friendly way at me, just sane enough not to ignore. That was ten years ago. Now he was raging at everyone, accusing the teenagers queueing in the kebab shop of being batty boys and saying “bloodclaat” a lot. (Batty boy: homosexual. Bloodclaat: tampon.)

The people he was addressing knew perfectly well what he was saying. They shrugged it off. I got on the bus; so did he, and the whole bus knew about it. There was nothing friendly in him now, and I wondered through which hole in the increasingly threadbare welfare safety net he had been allowed to slip.

That’s it, I thought. I’m getting out of London, its pampered core oblivious to the surrounding anguish. The world in a nutshell. Luckily, my great friend S— had asked if I could cat-sit for her in Brighton. I know her cat, and I know Brighton. Also, I know about a dozen people there who I keep meaning to see, so why not? London was making me ill, and possibly a bad person. So S— invited me down a couple of days before she was due to go on her holidays, and I took the first train I could.

And now I find myself sitting on a sunlounger in a tiny backyard, in a charming house just abutting the North Laine, and the mood is palpably different to the capital’s. It is like a city ought to be: compact, diverse and funky. There is no reek of High Capitalism. It is healthily decadent. It would appear to be full of people who have rejected the idea of London. It still has an enormous number of beggars, but more people were dropping money for them than I ever saw do so in W1, W12 or N2.

So this is what it’s like to fall out of love with the city of one’s birth. What most surprised me was the speed and force with which it happened. I’d made my mind up over a nice lunch that my friend N— was buying me, to cheer me up.

“Don’t you have to stay in London? You know, for book launches and things like that?”

“I don’t go to fucking book launches any more,” I said. I was taken aback by the vigour of my reply. I’m only here for ten days but I have plenty of people to see and dozens of memories, all good, to bump into. I’m already feeling better. 

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 14 September 2017 issue of the New Statesman, The German problem