‘Banker-bashing’ does not make Labour anti-business
Twitter
Facebook
Delicious
Digg
Stumble
RedditLast week saw the deadline for submitting annual self-assessment tax returns. As anyone running a small business knows, the whole exercise is a pain; just another of the many time-consuming, unnecessarily complex pieces of compliance work they are obliged to carry out.
Our bankers, in contrast, don’t know they are born. They live in an altogether more rarefied world. Too big to fail, they are immune to the pressures on real businesses in the real economy; struggling to wade through a recession our bankers did so much to cause.
But last week the red braces of our banking elite took a twanging with the denouement to the saga surrounding Stephen Hester’s bonus and Fred Goodwin’s knighthood.
Hester, the current RBS chief executive, generously chose to forego his million pound bonus, after, it has to be said, a not insubstantial public furore about the size of the pay-out.
Meanwhile his predecessor, Fred Goodwin, had his knighthood – awarded for ‘services to banking’ – rescinded; joining a traitor like Anthony Blunt and a tax fiddler like Lester Piggott in the ceremonial sin-bin.
At this point, we have to be careful. Bankers, we are told, are sensitive wallflowers. They have feelings too. Having brought our economy to its knees with their risky investment decisions we are supposed to now eschew the temptation to hold any of them accountable for their actions.
As if running for the front of the dinner queue, former CBI director-general Digby Jones waded-in, warning that there was “the faint whiff of the lynch mob on the village green” about the way Hester and Goodwin were being treated.
Simon Walker, director-general of the right-wing Institute of Directors joined him, bemoaning “anti-business hysteria” while Alastair Darling said it was “tawdry” to be seen to be “going after individuals” like Goodwin.
So far so predictable from the likes of Jones and Walker, but Darling’s intervention was extremely disappointing. He should know better than most just how much damage Goodwin has done.
More shrewdly, the BBC’s business editor, Robert Peston, pointed out that Goodwin was in a “class of his own” in terms of the risks he took at RBS and the size of the taxpayer bailout required to stave off the bank’s collapse.
Even John Redwood – (yes, that one) said the decision was justified, claiming Goodwin’s tenure at RBS had been “mightily expensive to his shareholders and to the wider nation.”
By the end of last week, in a bid to draw a line under the soap opera that RBS has become, the bank’s current chairman, Sir Philip Hampton was rolled out, warning, obliquely, that “we’ve got to watch it”.
“I think some of the sentiment from Government ministers and [other] politicians recently won’t necessarily help confidence in business morale and inward investment” he said.
“Business”, you see, not “banking”. This is a clever piece of attempted misdirection. Hampton would have us believe the public’s rightful indignation at bankers is really an attack on all businesses.
Well it isn’t. No-one is taking to the ramparts. Just awarding criticism where it is sorely due.
And, anyway, what makes bankers so special? My dad is a bricklayer. Does anyone ask him if he’s upset because programmes like Rogue Traders spend their time castigating people in the building industry?
Our bankers need to grow a backbone. A dose of justified criticism sees them take a fit of the vapours.
‘Ah, be careful’, we are usually warned at this stage, ‘this is an international market and they will leave if we keep calling them names’.
No they won’t. The curse of having financial services take up so much of the British economy is that there are not many places for them all to go. And if it’s truly an international market, people from other countries will come here to replace them.
If Stephen Hester could see further than the end of his nose, he would realise that if he manages to turn around RBS’s fortunes then any big corporate job is his for the taking. In that context, his RBS bonus is a trifle.
Yet the political incompetence of both Hester and Hampton in failing to read the public’s mood and the political runes quickly enough raises serious questions about their judgement and whether they are the people for the job; especially as RBS missed its latest lending targets under the Merlin accord.
As for Fred Goodwin, my heart bleeds. This is a man who scuttled one of the largest banks in the world; exposing millions of people –individual savers, small business owners and mortgage holders alike – to cataclysmic risks. Millions stood to lose everything. All Mr. Goodwin has lost is a bauble for ‘service to banking’ that, demonstrably, he longer deserves.
Without the government’s intervention of £45 billion of taxpayer’s money back in 2009 RBS would have folded and all its savers would have lost everything while a chain reaction would have ripped our economy apart.
Labour has been punished for allowing the collapse of RBS to happen on its watch. And we must take our share of the blame for a regulatory framework that did not do enough to challenge the dominance of freewheeling high finance.
But so should corporate cry babies like Goodwin. His personal humiliation is justly deserved – but is no doubt cushioned by the extravagant £340,000 a year pension-for-life he managed to secure. Well, for now at least.
Alistair Darling was a competent minister, but he is no political strategist. He should worry about the millions of decent RBS customers who nearly lost everything rather than rushing to the aid of UK banking’s rottenest apple.
I put ‘banker-bashing’ in inverted commas at the start of this piece because challenging avarice and punishing manifest incompetence is no such thing. Banking remains a strategic sector and the ramification of its often reckless culture threatens our whole economy. We should have no qualms about challenging their excessive behaviour.
Yes, Labour needs credibility when it comes to dealing with business; but banking is not synonymous with business. Labour should be more worried about showing that it understands the challenges of those struggling to paddle through the economic rapids – especially the millions of decent and responsible business owners.
In these straitened times, our blubbering bankers will have to learn to develop a thicker skin. Too many simply do not accept the damage they have done, nor understand the level of public anger at the consequences of their actions.
It appears it’s true what they say: banking really does make you go blind.
