How transparent is Merlin? George Osborne says it will make London the most transparent financial centre in the world on remuneration.
But that won’t mean the public will be able to gawp at the pay packages of the top earners at Britain’s biggest banks. Watch out for Merlin’s sleight of hand. Read more
One Tory MP buttonholed me this morning to ask why the FT this morning carried a story about the donations from the Square Mile to his party. (Donations from financiers and City firms now account for more than half the £22.5m the Conservatives attracted last year.)
“You should hardly be surprised by now that your readers support our party,” he observed.
Up to a point, Lord Copper. Yes, the City has always backed the Tories (with a temporary swing away during the peak of New Labour) while the unions are the cornerstone of Labour.
Plus the proportion of City money going to the Tories has actually fallen from 52 per cent in 2009 to 51 per cent last year, if you look closely at the figures in the report by the Bureau of Investigative Journalism.
But the underlying trend is still worth reporting (it’s also the splash in the Guardian) as it shows a medium-term rise in the proportion of funding from city sources – up from just 25 per cent in 2005. Read more
We reported yesterday that David Cameron had joined Nick Clegg in warning of new action against banks which did not show bonus restraint.
David Cameron warned banks on Friday that they faced higher taxes if they continued to pay “unjustified” bonuses, adding to a growing political and regulatory pressure on the City before the industry’s bonus season early next year.The prime minister, speaking after a European Union summit in Brussels, said that the public found such payments “galling”, adding: “Every decision the banks make like that makes it more difficult to keep a tax regime that they might favour.” Read more
Transparency on high-end pay is good for Whitehall but not yet for the City – that is the conclusion emerging from the Treasury.
But what about the Lib Dems? Weren’t they billing themselves as the slayers of City excess? Tackling “obscene” banker pay was one of Nick Clegg’s top four priorities in the election campaign.
Yet it seems the element of the four point plan where the Lib Dems have made least progress.
Just compare what has happened to the proposals Clegg unveiled during the election.
Cash bonuses? Uncle Vince says £2,500 is your limit. Board level bonuses? Banned outright. (Vince made a joke about how the bank directors can make do with free golf club membership.) Working at a loss making bank? No bonus at all.
There was more. The one measure that really stood out was transparency. Cable and Clegg wanted to require banks to publish the names of all staff on a pay and bonus package greater than the prime minister’s salary. This would not only have ensnared top traders — it probably would have included their PAs as well.
When we asked Clegg about this recently, he dismissed the question, saying the Walker review was being implemented. When we pointed out that the legislation had been delayed, he seemed a bit taken aback.
Now George Osborne wants to impose such transparency rules on high pay “internationally rather than unilaterally” — which is an all too transparent code for shelving the reforms. Sir David Walker, the City grandee who proposed the tighter disclosure rules, has given the chancellor some convenient cover.
What will Clegg do? This will be a fascinating test of Lib Dem resolve. Read more
In opposition one of Vince Cable’s favourite pastimes was taunting Barclays and Bob Diamond, their investment banking chief. Read more
Nick Clegg has put a lot of effort into assuaging City nerves over a hung parliament. Britain’s credit rating will be safe in Lib Dem hands, he insists. But, even if that is true, Britain’s investors and bankers will still be poorer for it. Given half the chance, Clegg and Vince the Bonus Snatcher want to plunder the City, break up the big banks and mount Gordon Gekko’s head on a spike.
In Westminster it’s open season on bankers. Osborne, Mandelson — everyone has had a pop. But the Lib Dem plan unveiled today is the high-watermark, the Daddy of all City crackdowns. Most bankers will probably be thinking: Why should we care? Well, if there is a hung parliament, these reforms will be one of the top four Lib Dem priorities. Read more