If you haven’t seen today’s BBC interview with Lord Myners it’s worth a look.
The guidance I was getting yesterday from a Treasury source was that the government realised that banks needed to pay competitive salaries to their staff (a line echoed by Lord Mandelson today). And it would thus be wrong to crack down too hard on bonuses.
That’s definitely not the line taken by Myners, City minister, however.
In his five-minute interview, he:
1] Attacked institutional shareholders (naming Legal & General, Standard Life and Fidelity) for failing to come out in public with any opinion on the issue. It was simply “unacceptable” that they had not come out to explain their positions, he said.
2] It was all very well talking about directors’ fiduciary responsibilities towards shareholders – but the biggest shareholder in RBS is the taxpayer.
3] An attack on the sometimes obscene (my word, not his) remuneration in the City per se. Myners pointed out that someone working 40 hours a week on the minimum wage earned £12,000 a year. The national median earnings is £20,000 a year.
“We are talking here about people who have a feeling of entitlement to bonuses of half a million, one million, sometimes, 5, 10 or 20 million pounds, I think they have to come back into the real world and understand that the banking industry has required large support from the taxpayer.”
All in all, a very robust attack on City culture. Let’s see if it will have any effect.
UPDATE
Now we’ve had Harriet Harman speaking in similar terms:
“I’m happy to condemn those who simply have no recognition of the fact that people expect the banks to play a part in the economy and lend out to businesses, pay back the money they’ve needed – because they’ve nearly fallen off the edge of a cliff because of recklessness and irresponsibility – and expect them not to at the back end of all of this be awarding themselves massive bonuses.”
Jim Pickard
Kiran Stacey
