Banking,  Economy,  UK Politics

Labour isn’t working

Under a Labour government

Unemployment increased by 220,000 to 2,435,000 in the three months to June, taking the jobless rate to 7.8%.

Claims for unemployment benefit were the highest in 12 years, increasing by 24,900 in July to 1.58 million.

Average earnings, excluding bonuses, grew at their slowest rate since records began in 2001, the Office for National Statistics said.

And in the sector largely responsible for this? What have we done?

The City watchdog was accused of giving banks a green light to continue paying multimillion-pound bonuses yesterday when it backed away from introducing tough rules to curb excess pay.

The Financial Services Authority’s proposals on City pay embarrassed Gordon Brown, who had promised to sweep aside the bonus culture in the financial sector. Opposition politicians branded the FSA’s new proposals a capitulation. The Treasury also indicated that they did not go far enough.

Watching some obviously overpaid bankers drinking in a wine bar on the news last night defending the bonus culture, I heard the argument that they would leave if not offered bonuses. Frankfurt was given as a potential destination. Pay them a salary, like normal people, and if they choose to go – let them. It is clearly unacceptable that the very sector that recklessly screwed up the economy should return to business as usual, when the recession is merely beginning to hit the society they hold in such contempt. Even worse, it is the very members of that society that kept their sector upright when it was recently staggering near the gutter.

We have only a few months of a Labour government left. Why don’t they try doing the right thing in those remaining months? There are such things as lame ducks in politics, but usually the lame duck doesn’t saw its own leg off.

UPDATE: Dave Osler notes, “On some predictions, banking staff will get an all-time record collective bonus of £4bn this year, up from £3.3bn in 2008.”