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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Jeremy Corbyn sat down on train he claimed was full, Virgin says

The train company has pushed back against a viral video starring the Labour leader, in which he sat on the floor.

Seats were available on the train where Jeremy Corbyn was filmed sitting on the floor, Virgin Trains has said.

On 16 August, a freelance film-maker who has been following the Labour leader released a video which showed Corbyn talking about the problems of overcrowded trains.

“This is a problem that many passengers face every day, commuters and long-distance travellers. Today this train is completely ram-packed,” he said. Is it fair that I should upgrade my ticket whilst others who might not be able to afford such a luxury should have to sit on the floor? It’s their money I would be spending after all.”

Commentators quickly pointed out that he would not have been able to claim for a first-class upgrade, as expenses rules only permit standard-class travel. Also, campaign expenses cannot be claimed back from the taxpayer. 

Today, Virgin Trains released footage of the Labour leader walking past empty unreserved seats to film his video, which took half an hour, before walking back to take another unreserved seat.

"CCTV footage taken from the train on August 11 shows Mr Corbyn and his team walked past empty, unreserved seats in coach H before walking through the rest of the train to the far end, where his team sat on the floor and started filming.

"The same footage then shows Mr Corbyn returning to coach H and taking a seat there, with the help of the onboard crew, around 45 minutes into the journey and over two hours before the train reached Newcastle.

"Mr Corbyn’s team carried out their filming around 30 minutes into the journey. There were also additional empty seats on the train (the 11am departure from King’s Cross) which appear from CCTV to have been reserved but not taken, so they were also available for other passengers to sit on."

A Virgin spokesperson commented: “We have to take issue with the idea that Mr Corbyn wasn’t able to be seated on the service, as this clearly wasn’t the case.

A spokesman for the Corbyn campaign told BuzzFeed News that the footage was a “lie”, and that Corbyn had given up his seat for a woman to take his place, and that “other people” had also sat in the aisles.

Owen Smith, Corbyn's leadership rival, tried a joke:

But a passenger on the train supported Corbyn's version of events.

Both Virgin Trains and the Corbyn campaign have been contacted for further comment.

UPDATE 17:07

A spokesperson for the Jeremy for Labour campaign commented:

“When Jeremy boarded the train he was unable to find unreserved seats, so he sat with other passengers in the corridor who were also unable to find a seat. 

"Later in the journey, seats became available after a family were upgraded to first class, and Jeremy and the team he was travelling with were offered the seats by a very helpful member of staff.

"Passengers across Britain will have been in similar situations on overcrowded, expensive trains. That is why our policy to bring the trains back into public ownership, as part of a plan to rebuild and transform Britain, is so popular with passengers and rail workers.”

A few testimonies from passengers who had their photos taken with Corbyn on the floor can be found here