Friday, March 13, 2009

House Points: Vince Cable on bonus culture

These days I find it's best just to let Vince Cable get on with it. The article by John Lanchester was published in the London Review of Books.

Vintage Vince

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.

Vince began:

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.

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?

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:

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.

At least the credit crunch will release the City’s stranglehold on the economy and London.


HE Elsom said...

Sadly, I think the "monkey's second assistant" quip originated with Simon Hoggart on an occasion when Melanie Johnson took Chancellor's questions.

Charlieman said...

Somebody should write a book about the Vince Cable explosion -- not about him personally but about his media presence.

A couple of years ago, in a pub conversation, I was asked about the depth of talent within the Liberal Democrats, beyond the then leader, Charles Kennedy. I pointed to Ming Campbell as an obvious choice, and added Vince Cable. The response was "Vince who?".

The problem with the Cable media explosion is that it distracts from normals such as David Laws and from wonderful eccentrics such as Norman Baker and John Thurso. Indeed, the most powerful argument for Liberal Democrats is that they put interesting, challenging people in parliament.

dreamingspire said...

Norman Baker challenging? I just wish that he would get up to speed on the Dept for Transport (not of - BBC R4 just made that mistake again at 0710 in its review of the Sunday papers - and sometimes against).