On Monday Alistair Darling was travelling to Brussels. So it was Stephen Timms, the financial secretary to the treasury, who made a statement on the effective nationalisation of the newly amalgamated Lloyds HBOS bank.
He then had to take questions. And if Mr Speaker had been a boxing referee he would have stopped the contest between Timms and Vince Cable.
He went on to disclose that Eric Daniels, the bank’s chief executive, received a £25,000 “tax planning allowance” to help him avoid UK taxes. Would this continue under public ownership? And would two executives whose property dealings had brought down HBOS receive their £6m bonuses?
There would once have been a time when a government commitment of £260bn of taxpayers’ money, which is just under a quarter of gross domestic product, would have merited the attention of the Prime Minister, let alone the Chancellor … On this occasion not only are we denied the attentions of the organ grinder, but we are not sent the monkey either, but the monkey’s second assistant.
Timms could provide no answers.
And Vince said he saw no justification for paying bonuses at all in a bank that has made large losses. “It is all very well to appeal for sympathy for the relatively low-paid staff,” he said, “but how would people react if it was announced that every public sector worker was to be paid a £1,000 bonus, in the present state of the public finances?”
We Liberal Democrats like profit sharing – it’s the last pale ghost of the old Liberal interest in workers’ cooperatives. But can we support it when there are no profits to share?
And the City’s bonus culture before the fall had a terrible effect on London. As John Lanchester wrote last year:
At least the credit crunch will release the City’s stranglehold on the economy and London.
City money is strangling London life. The presence of so many people who don’t have to care what things cost raises the price of everything, and in the area of housing, in particular, is causing London’s demographics to look like the radiation map of a thermonuclear blast. In this analogy only the City types can survive close to the heart of the explosion.