It’s a pity that Ed Miliband is seen as the leader of the campaign against the bankers’ bonus culture, because that gets it presented in the media as a battle between left and right, with David Cameron portrayed as just indulging in a bit of tactical banker bashing to avoid losing too many votes to Labour or the LibDems rather than as having any genuine problem with the bonus culture.
But he should have a problem with it shouldn’t he? A big problem. And so should we all. There is something profoundly troubling about it, regardless of your politics.
Just look at the facts. The top brass of any big bank are paid huge basic salaries at the end of every year regardless of how well or badly the bank has performed in that year. Those salaries are so great that after just a few short years they could easily retire with pension pots big enough to allow them to live in total luxury wanting for nothing that any normal person in their wildest dreams would crave for for the rest of their lives. Jobs paying salaries like that should surely be something that their occupants hug themselves in disbelief at their good fortune in having been able to land, and in which they work like crazy to demonstrate that they are worth every penny of the money and should most definitely never be sacked for less than first-rate performance.
But is that what they do? No, what they do is persuade their boards to write them quite staggeringly large bonus cheques on top of those mammoth salaries because, it seems, it should not be they who should be worrying about being sacked and losing their huge salaries if they don’t perform, but their boards and shareholders who should be worrying that if they don’t give them surreal bonuses as well they will walk, and the bank will immediately implode for lack of anyone with the right skills to run it. The board members are only too ready to approve the bonuses because they are all on the same bonus gravy trains and look forward to ever-more obscene amounts of bonus money themselves as they climb up the ladder. God knows why the shareholders don’t put a stop to it. Maybe a lot of them, being big institutions, are controlled by people on similar huge bonuses themselves. And maybe the rest either just can’t get organised about it or have been brainwashed into believing that their investments really are best served by the bonus culture.
The whole thing just stinks of the most God-awful corruption on a massive scale. What is truly scary about it is the implication that the ability to run big banks successfully is only to be found in people who will not do it unless they are allowed regularly to stuff their fists in their multi-million pound tills and pretty much take from them as much as they like, on top of what are already quite staggeringly generous basic salaries. In other words, if that is true, it means that our financial services sector on which we have allowed the health of our economy to depend so critically is in the grip of people of extremely dubious morality.
But of course it cannot be true. It is a self-evident con. The people can only carry out their threat and ‘walk’ to other banks if there are out there banks willing to give in to their threats and pay them. It should be a relatively simple matter for shareholders of the world’s top banks to get organised and call their bluff, leading either to their backing down or to there being one hell of a lot of unemployed former bank top brass forming queues outside head-hunter offices. In truth, there must surely be no shortage of first-rate people who are both fully competent and prepared to work their socks of as big bank top brass for an extremely generous salary alone, standing ready to be sacked if they do not deliver value for money. If there aren’t, we are all in deep trouble, for it means we cannot survive without tugging the forelock to a bunch of amoral, ruthless bastards.
If the shareholders can’t or won’t get organised to do anything about it, then governments will have to do the job for them. Sooner or later, if things go on as they are, the Tory party’s resistance to attempts by Merkel, Sarkozy and others in the EU to do battle with the financial services sector is going to be seen not as defending the UK’s interests but as conspiring to help a bunch of spivs to keep shafting us all.
