Let’s get one thing straight. Neither the Chancellor, the Treasury or the Government have any legal hold over the banks. Except, of course National Savings, the mortgage part of Bradford and Bingley(the good bit was handed to Santander) and Northern Rock (they had no choice on that one).
The banks are holding ALL the aces and the Chancellor can do nothing except appeal to the bankers’ better nature.
The so-called “Project Merlin” , like the Big Society and its bastard and as yet unborn child “The Big Society Bank” are no more than pretty average marketing slogans. The concepts do however have the “all furs and no knickers” qualities that the ConDem Coalition seems to have applied to everything that it has touched.
Bob Diamond of Barclays will still have his £9million bonus, RBS’ Stephen Hester will still earn over £2 million, Stuart Gulliver of HSBC will take home over £5 million and Lloyds’ departing supremo Eric Daniels will soon be cashing in his severance present of nearly £1.5 million in Lloyds shares.
So the smugly complacent George Osborne continues to have achieved nothing. He should therefore STOP trying to fool the electorate – we had enough “spin”, half-truths and downright lies from the last lot. The ones who are the cause of the “tough choices”(yawn) that we keep hearing about.
So what is the magnificent “deal” that this former Conservative office backroom boy has managed to negotiate with the hard-nosed banking bastards to whom politicians are no more than a light starter and who, for years have been running rings round these primped amateurs who (wrongly) believe that they know how to negotiate and play with the big boys?
Politicians have always confused rank with ability. Most have been elevated on a Prime Ministers whim, whereas any senior banker has had to fight his way to the top and bears the sort of negotiating battle scars and responsibilities that someone like George Osborne can only dream of.
(Remember that it was politicians who cleverly more than doubled General Pracitioners’ incomes through their artful negotiation and it seems that they’re about to do it again).
I have acquaintances who relish negotiations with anyone political – hence the over-priced computer systems and all the other peripheral rubbish that has been flogged to governments over the years. The latest was the expensive and pointless www.police.uk There are hundreds of other examples of bad government negotiation, both at national and local level.
It has to be said that former Warburg Investment Management Director and now (very recently) former ConDem Coalition Treasury spokesman, Baron Oakeshott of Seagrove Bay was right and continues to be right.
In December 2008, he said “…banks must start lending to small and big business again or they will imperil the British economy”. He went on to say that the then Secretary of State for Business had grasped “much more quickly than the amateurs in the Treasury how shocking it is that the banks have virtually gone on strike.”
He continued:” Private companies with millions of jobs are in great danger of going down next year and we need to focus on lending to big business too.”
Over two years later, the banks are still not lending and the only major change is that the New Labour group of Treasury amateurs has been replaced by new cannon fodder, led by the posturing Gideon “George” Osborne .
Yesterday Lord Oakeshott left “by mutual consent” (was fired) for saying that the Treasury’s negotiating team had an “awful combination of arrogance and incompetence”.
So what did the Osborne Gang achieve? Was Matthew Oakeshott right again?
John Walker, chairman of the Federation of Small Businesses said that the commitments which the bankers signed up to were “unenforceable”. He’s right.
The banks have agreed to “show restraint” in the matter of bonuses. That is meaningless. When you negotiate and you reach an agreement, it should contain two out of three of the following measures (they’re very straightforward): Quality, Quantity and Time. For example: By the end of 2012, the maximum bonus that anyone within the banking industry can receive will be not more than 25% of their base salary.
That would be a properly negotiated agreement. “Show restraint” is a mere promise with no comebacks . It is a gentlemens’ agreement.
Tha banks have agreed to disclose the salaries of their five highest employees. Why? It’s pointless and, oh yes, although the amounts will be disclosed, the names of the recipients will not. When negotiating, one technique is to throw your opponent a worthless bone which he thinks is of value to him. The bankers threw Gideon the useless “disclosure bone” and he lapped it up, no doubt brought it back to his master for the customary pat on the head. “Well done Gidders. Goood boy!”
Apparently the banks have agreed to lend £190 billion to businesses including £76 billion to smaller businesses. When? Starting now? Which bank is lending what? Are there any new rules? Is the government expecting the banks to ease their too-stringent lending criteria? Is there going to be a Lending Ombudsman to complain-to when my own bank refuses a perfectly reasonable request for a couple of million unsecured folding wedge?
The most scandalous part of the agreement is the £200 million which the banks intend to steal from bank “dormant” accounts in order to fund David Cameron’s currently abstract “Big Society Bank”. These accounts belong either to dead people or people who have simply forgotten that they have a bank account.
There are about half a million dormant bank accounts containing over £500 million languishing on bank balance sheets. These are accounts which have not seen transactions for a while but on which banks continue to pay interest. Presumably, once the accounts have been plundered in order to fund Cameron’s community projects, the banks will no longer have to pay interest to the dormant account beneficiaries.
Another well-negotiated victory for the banks! They not-only stitch up the Chancellor but they manage to save money as well!
The bankers continue to rob their own clients while the ConDems simultaneously act as” lookout”, “wheels man” and “fence”.
This has been promulgated by the Chancellor as a cleverly negotiated deal and needless to say, he is expecting maximum Brownie points.
On the contrary, what he has been given by the condescending bankers is a series of shallow (and worthless) concessions or promises which are not worth the paper they’re written on – assuming of course, that they did actually commit to paper.
No doubt, the Treasury Press Office will shortly be distributing the historic document.
Lord Oakeshott was right. Amateurs.