Chancellor’s ‘cosy’ deal with the banks unravels

By Mark Ferguson / @markfergusonuk

The chancellor’s much talked-up deal with the banks “Project Merlin”, has begun to unravel within hours of its announcement. Shadow chancellor Ed Balls has attacked the proposals this afternoon, calling it a “cosy deal with the banks” with a “clear get-out clause”. Hidden away in the small print of the agreement is the following clause:

“3.5 nothing in this statement derogates from the obligation of the banks, and their boards and remuneration committees, to manage pay policy in a way which protects and enhances the interests of their shareholders.”

This effectively means that banks can ignore everything else in the agreement if they can argue it “protects and enhances the interests of their shareholders.” Speaking this afternoon, Balls slammed the plans – especially the loophole which makes this agreement ineffective:

“No wonder George Osborne didn’t give me a copy of the full Merlin agreement before his House of Commons statement and only gave me a copy of his statement 10 minutes in advance – because the Chancellor’s cosy deal with the banks is unravelling by the hour.”

“The small print of the agreement has a clear get-out clause which allows the banks to do whatever they wish to enhance the interests of their shareholders.”