Daily Archives: June 19, 2013

Jim Pickard

It emerged the other day that Labour set up a secret Treasury team to examine the issue of hard-pressed low-income workers as early as 2005: only to then do nothing with its findings.

Ed Miliband has taken credit for coining the phrase “squeezed middle”, even though it was actually former shadow health secretary John Healey who first started using it in this country.

While the expression was mocked at first – what demographic was Miliband talking about precisely? – it is now seen as a cunning piece of political positioning. The next Read more

Jim Pickard

Some of you may have already followed the 161 hours of evidence during the Parliamentary Commission on Banking Standards. Others will have read the 571 pages of the report, published overnight.

For those who have neither the time or inclination, here is a summary of the main points – with analysis of whether Osborne is likely to take heed or not. (The chancellor has indicated his full response will be ‘within a month’.)

1] Weighing up an RBS split. The report says the government should carry out “detailed analysis” of splitting RBS into a good bank and state-owned toxic bank. (This was encouraged by Sir Mervyn King and Lord Lawson.) Alistair Darling, the former chancellor, told me last night that splitting up RBS was “just wrong” and not backed by anyone outside the commission. The idea was a “red herring” that would involve a messy, expensive, time-consuming process, he said.

Consequences: Osborne may go through the motions but is unlikely to re-invent the wheel, instead preferring a less seismic restructuring

2] End government interference. Treasury should wind up the ineffectual arms-length UKFI. Interference at RBS has been particularly damaging, the report says.

Consequences: Osborne is likely to ignore this recommendation.

3] Bonus delays. The commission wants banks to overhaul their pay structures to align rewards and risks. Bonuses could be delayed for up to 10 years.

Consequences: Osborne is likely to implement elements of this but may consider the Read more