Cameron’s big talk on fatcat pay is just that, and nothing more

by John Woodcock

By sitting on his hands while Ed Miliband spoke for the public over Stephen Hester’s bonus, David Cameron has failed an important test over fairness at the top.

As the welfare reform bill returns to the House of Commons, Labour has an opportunity to show that we are the party best placed to deliver fairness at the bottom too.

To start at the top. The prime minister ought to be worried by the way he has allowed himself to seem out of touch and evasive on an issue that has symbolised people’s resentment of unjustified rewards for the highest paid. As an opposition leader, Cameron was adept at understanding and reflecting the public mood. He often moved swiftly on emerging issues, leaving the then Labour government struggling to catch up. Yet on banker’s bonuses he has shown both a flat foot and tin ear – failing to show leadership over the specific issue of the Royal Bank of Scotland chief executive, and refusing Labour’s call for a repeat of the bank bonus tax to get more young people into work.

Were it not for shadow business secretary Chuka Umunna revealing the element of discretion over bonus payments in the Royal Bank of Scotland chief executive’s contract, the government might still be effectively hoodwinking people by suggesting that its hands were tied. Ed made the point last week that Cameron has left himself vulnerable by talking big on the subject of excessive pay while shirking the necessary action to tackle it. The PM’s failure to speak up over the scale of rewards at the top of a troubled state-owned bank is a prime example of that; it may linger in the public’s mind.

Ed has been clear from the outset, though, that leading the way in calling for action against unfair rewards at the top must be matched by a determination to address unfairness at the bottom too. When we stood on their doorsteps at the last election, voters were unsurprisingly angry about the way irresponsible bankers had inflicted so much damage on the British economy. But while the practices of the City of London were alien to their lives, many expressed a sharper resentment at the sense that people in their own neighbourhood who could be paying their way were able to get something for nothing from the benefit system.

We forget that at our peril. The Conservative-led government is set to lock in a nationwide maximum annual benefit level of £26,000 – a figure that seems incomprehensibly high to many working families struggling on modest incomes in parts of the country with lower housing costs than the capital.

Many MPs are finding that the reaction from their constituents to the proposed benefit cap is not full throated praise that ministers are acting; rather, many working people cannot believe that the cap is being set so far above the wage level that they work their socks off to earn.

That is why shadow work and pensions secretary Liam Byrne is right to suggest independently set local variations on any benefit cap this week. Determination to confront this issue head on is a necessary part of our commitment to fairness at all levels. It is equally necessary if we wish to remain in touch with the working majority who we were elected to represent.

John Woodcock is Labour and Cooperative MP for Barrow and Furness and a shadow transport minister.


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8 Responses to “Cameron’s big talk on fatcat pay is just that, and nothing more”

  1. swatantra says:

    Its right that a cap should be set. But the problem lies specifcally to London, where in order to create a mixed tenure residential London, its necessary to subsidise poorer tenants otherwise you end up with a yuppy ghetto. But having said that if a family were to recieve say £30K in benefits inc housing, its a kck in the teeth for your honest hardwoking family not on benefits. Its patently unfair. They could find a residence much cheaper. But then you end up with a London filled with only the wealthy. I honestly don’t know the answer, and I doubt if anyone else does.

  2. Nick says:

    That will be Chuka (off shore trust fund ) Umunna and his 3,000 pound suits?

    So what level is the Labour going to suggest for the benefit cap?

    5 suits worth? Or is it 10 suits worth?

    hat is why shadow work and pensions secretary Liam Byrne is right to suggest independently set local variations on any benefit cap this week.

    So name the rates. What’s the cap going to be in the Wirral and other Labour heartlands?

  3. Clr Ralph Baldwin says:

    All Chukka succeeded in doing was opening a can of worms, damaging to Labour due to the history of these bonuses and allowing Cameron the Opportunity to act…still have no idea about timing this farce of an opposition.

  4. Following Goodwin’s shredding of RBS and the enormous tax payer funded rescue that followed, he was effectively (and understandably) forced out of office by the then Labour government. What followed could be regarded as being farcical if it had not been so dreadful.

    Officially he was due a pension pot from RBS of £8 million, which came on top of other pension entitlements from his previous jobs. Following his departure and for reasons that have never been made absolutely clear it was revealed that this had somehow been increased to £18 million. However when his supposed annual pension from this was backtracked it became clear that it was actually being supported by £25 million.

    Just as with Stephen Hester’s current bonus entitlement, Goodwin’s entitlement to anything on his departure from an insolvent bank, the rescue of which had been forced on the tax payers, was in the gift of the Labour government of the day. They were now in a position to call the shots but as events showed they failed to do so.

    Eleven years of such colossal shenanigans practised by greedy and ruthless senior executives of our banks had been a weekly occurrence before this final insult. Nothing was done to stop it then and even when the whole banking system was teetering on the verge of collapse this was still allowed to continue: Milliband and the rest now seeking to tar the present government with a brush of their own making is sheer hypocrisy.

  5. swatantra says:

    I can’t believe that Chuka goes around in £3000 suits. He’d be better off shopping at Matalan where you and I can pick up suits for £60. And I can’t belive that nonsense about an offshore Trust fund. If he’s sitting on a pile he needs to come clean. Chuka was right to go back to the contract: it was only discretionary and at this moment in time it was not rght to pay it.

  6. vern says:

    John
    you have your head in avery dark place and if you want to be taken seriously start asking hard working people in the street what they think.
    They know that Labour agreed the salaries, contracts & bonusses for the RBS staff and they also know that at the time these hard working folk were losing their jobs, taking 20% cuts in wages and working shorter weeks you continued to agree pay rises to those in the public sector who essentially deliver nothing to the bottom line.
    The real recession started in 2007/8 for everybody but Labour and the public sector.
    Such gross negligence and mis-management of our money should hopefully see you squeezed out of politics for a very long time.
    And “it was the bank’s that caused it all” does not cut the mustard either, you were in charge during a fabulous period of growth which had its foundations put in place by the previous administration only for you to squander fabulous opportunities and put us in such a perilous condition.
    i am appalled by you and your parties inability to accept responsibility and apologise for your misconduct. Shameful.

  7. swatantra says:

    Rubbish! You cannot blame Labour for the deal it made with Hester. Bonuses are a culture endemic within the Banking community and you can’t change the culture overnight. Bankers have had awake up call’ its up to them to put their house in order; if they refuse Ed is right to say the next Labour Govt will do it for them, by scrapping the bonus culture.

  8. vern says:

    And as long as you continue your denial Swatantra and absolve yourselves of any responsibility for what has happened i feel that you will never mount a credible opposition to the current coalition.
    Blame the Bankers! Who regulated them? End of debate!

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