You may recall the pre-election macho posturings of our political leaders in respect of bankers’ bonuses. You may now be wondering why, after two years, bankers are still in receipt of what to most of us appear to be eye-watering pay-outs. OK, so about half of the £7 billion which will be paid to them will eventually appear in the Chancellor’s coffers as tax revenue but “the big picture” is far more interesting.
Traditionally, many MPs have post-Westminster consultancies to look forward to. For some, those consultancies and directorships are within the banking industry and for others, the consultancies are just being kept warm until such time…………
The article below was written by the Daily Mirror’s Political Editor, Jason Beattie and appears in today’s paper. It is reproduced here with Jason’s full permission.
The Tory Party’s deep links to the banks are exposed today in a Mirror investigation.
The close ties will fuel speculation that the Tory-led Government is deliberately giving its friends in the City an easy ride.
Chancellor George Osborne has come under attack for letting the banks off the hook by imposing a levy of just £2.5billion.
The Treasury has also been criticised for failing to clamp down on tax avoidance by major UK companies and allowing City high-fliers to keep pocketing exorbitant bonuses.
The Tories also stand accused of introducing laws that give a full tax exemption for British companies’ tax haven branches and letting them get away with an 8% tax rate for profits diverted to havens through internal financing.
Our investigation found that of the 498 Tory MPs and peers 134 have been or are employed in the financial sector, this includes 70 of the party’s 305 MPs. Among the 193 Conservative peers, more than a third work or have worked in finance or banking.
Altogether there are more Tory MPs who have been on the banks’ payroll than the total number of Lib Dem politicians.
Labour MP Tristram Hunt said: “The Conservative Party is as much as ever the preserve of a small elite of professions of which financial services is by far the largest.”
Among the Cabinet members with links to the City are Paymaster General Francis Maude, who has worked for Solomon Bros and Morgan Stanley; Leader of the House of Lords, Lord Strathclyde who was chair of Trafalgar Capital Management from 2001-10; Cabinet Office minister Oliver Letwin, who worked for NM Rothschild & Son from 1986-2009; International Development Secretary Andrew Mitchell, who worked for Lazard Bros from 1979-2009; and Commons Leader Sir George Young, who worked for the Samuel Hill merchant bank.
Eleven Tory MPs and peers have worked for Barclays, including Richard Bacon MP, Jesse Norman MP, former Chancellor Lord Lawson, Earl Howe and Andrea Leadsom MP. A further eight Conservatives have been at Rothschild, including John Redwood MP, Mark Garnier MP, former Chancellor Lord Lamont and Jacob Rees-Mogg MP.
And four worked for Lehman Bros, the company whose collapse sparked the financial crisis.
They include Steve Baker MP, Chief Architect, Global Financing and Asset Servicing Platforms at the company from 2006-2008; Brooks Newmark MP and Lord Freeman. Others with links to the financial sector include billionaire Lord Ashcroft, welfare minister Lord Freud, Harriet Baldwin MP and Kwasi Kwarteng MP.
Since coming to power the Tories have imposed a bank levy which will raise an estimated £2.5billion a year. But at the same time, Mr Osborne has slashed corporation tax rates from 28% to 24% meaning the impact on the finance houses will be minimal.
The Treasury has also watered down the levy. Originally the proposal was for 0.07% on all of a banks’ liabilities. But the Government has said the banks will not have to pay the tax on the first £20billion of liabilities.
Mr Osborne has also failed to take forward the recommendation of Sir David Walker that banks should be forced to disclose all pay packages above £1million. And there has been no action to curb the bonus culture which is expected to see £7billion lavished on whiz-kids this year.
The big four banks between them paid some 200 staff an average of £1million last year.
Mr Hunt claimed it showed the Tories are inextricably linked to the world of banking. He said: “What this analysis shows is that the real coalition governing Britain is between the banks and the Tory Party.
“Can the Government really be trusted to encourage bank loans to small businesses, crack down on bonuses and end casino practices when so many of them owe their careers to the financial sector?”
He added: “Why should our public services pay for their greed and complacency?” Max Lawson, who is leading a campaign for banks to pay a £20billion “Robin Hood” tax said: “The Government needs to show that it puts the interests of ordinary people ahead of those of bankers.
“Former colleagues may be urging ministers to protect the City’s privileged position but the Government needs to close its ears to the pleading of special interests.
“Bankers have got away with too much for too long. They trashed our economy but continue to award themselves billions in bonuses. It’s time the Government woke up to public anger and made them pay to repair the damage they have done.”
The 24% Rate of corporation tax was cut from 28% by George Osborne, (who has no banking qualifications)
Francis Maude, Paymaster General, Worked for Solomon Bros and Morgan Stanley
Lord Strathclyde, Leader of the House of Lords, Chair of Trafalgar Capital Management from 2001-10;
Oliver Letwin, Cabinet Office minister, worked for NM Rothschild & Son from 1986-2009;
Andrew Mitchell, International Development Secretary, Lazard Bros from 1979-2009;
Sir George Young, Commons Leader, worked for the Samuel Hill merchant bank.
John Redwood, MP Co-chair of Policy Review Group on Economic Competitiveness, worked at investment bank Rothschild
Lord Freeman worked for Lehman Bros, the company whose collapse sparked the financial crisis.
Steve Baker MP was Chief Architect, Global Financing and Asset Servicing Platforms at Lehman Bros
Lord Lamont, Former Chancellor, worked for Barclays