How the Tory Government Lied About Bonuses and Protected the Banks

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Ben Cohen
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This story should be big, big news in the UK. George Monbiot of the Guardian has detailed how leaked documents reveal that the Tory government has been playing a double game with the British public - claiming on the one hand that they were doing their best to curb the excesses of the city, while lobbying for the exact opposite behind the scenes:

The leaked document, which was passed to a socialist-group MEP, lays out the UK Treasury's negotiating position. It reveals that "throughout the negotiation and implementation of the Directive, we have supported an interpretation that limits upfront cash to 40% of a total bonus". The European parliament's proposal – for a 20% limit – would, the UK claimed, "have a significant impact on the European financial services sector's international competitiveness." The Treasury, the document shows, also contested the plan to impose a minimum period for deferring the rest of the bonus payment. "Some may argue," the leaked document conceded, "that we are supporting a position that is less onerous on bank pay than other European legislators."

Under the heading "Line to take", the document proposed that the government should claim that it has "led the way in implementing G20 principles and doesn't believe that the EU should go further than what was agreed by the G20". It argued that "the only consistent option" is to drop the "minimum retention conditions". I'm publishing the leaked document in full on my website.

Monbiot outlines how the UK's proposals were rejected and the European Parliament's tougher rules adopted, only for Chancellor George Osborne to claim the new policies as their own:

On 11 January 2011, the chancellor, George Osborne, made the following statement to the House of Commons. "… on 1 January this year we introduced the most stringent code of practice of any financial centre in the world. For the first time, there will be a strict limit on the amount of bonus payable in upfront cash. Also for the first time, there will be a requirement that 50% of bonuses be paid in shares or other non-cash instruments, which bank employees will not be allowed to sell on for an appropriate period."

There is a very worrying pattern of deception going on here, where David Cameron's government is dressing up its policies as being progressive while systematically attempting to dismantle the state and its regulatory capacity.

This should come as no surprise given the party's history of constructing (or deconstructing) the state to protect the interests of the rich while ensuring social mobility and progress is virtually impossible for everyone else. Yet in Cameron's government, the British public faces a super slick sales operation that gently lulls them into inaction while ripping the carpet out from under their feet.