Sunday, October 18, 2009

MPs expenses and City bonuses are two sides of same coin.

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    It was the best of times; it was the worst of times. Actually, let’s just stick with the worst.  Last week was a tale of two cities: in the City of London, the scumbag bankers were getting away with golden sacks of money, courtesy of the British tax payer, while a mile away in the City of Westminster, MPs were revolting after being instructed by Sir Thomas Legg, the parliamentary auditor, to pay a few hundred quid in excess expenses.  Are the two in any way connected? Yes. 

  They are two sides eseentially of the same coin, the same bent penny, the same morality tale.   It is all about the collapse of trust and the rise of the greed society.  MPs resorted to fiddling their expenses because they wanted to hold their heads high in a society in which wealth has become almost the sole benchmark of success.  MPs are important people - they felt they should be able to afford nice homes, with nice furniture and bath plugs.  It was a question of the dignity of office. How could they speak on equal terms with bankers, lawyers, even doctors when they were wearing M and S suits and living in some modest terraced house - which is all they could afford on an MPs salary of ‘only’ £64,766. 

  So, they took full advantage of the second homes allowance to leverage themselves into the property market.  They flipped their second homes so that they could purchase and furnish a substantial family property, with their £24k allowance.  Then many of them flipped back, so that they could do the same with their real second homes in London.  Then they lost the plot entirely and piled on the expesnes for everything from flat screen TVs to porn films.  Not all MPs succumbed to temptation - but far too many did. 

  To fully understand how MPs became corrupted, you have to look at what was happening in the City in the early years of this century.  Politicians saw a lot of their contemporaries earning fabulous sums in big banks and investment houses - Gavyn Davies for example, who earns £2m a year with Goldman Sachs and is married to Tony Blair’s former diary secretary, Sue Nye. Bankers were no longer pariahs in the Labour universe. Indeed, under New Labour it became quite cool to be in finance, or to have spent time with an investment bank.  It gave you a kind of New Labour street cred.   The Prime Ministers office became  populated by bright young bankers like Baroness Shriti Vadera from UBS Warburg.  Political advisers, like Johnathan Powell, Blair’s chief of staff, went straight from office into Morgan Stanley.  His boss, went from Number Ten to JP Morgan Bank earning £2 million a year.  

  Ordinary MPs and ministers were feeling really hard done by,  so they got their snouts into the trough.  They lost any moral scruples about living lavishly on tax-payer’s money; worse they lost any sense that it WAS tax payer’s money.  While they were installing their mock tudor beams, their duck houses, their pergolas, home cinemas, Poggenpohl kitchen units and all the rest of the paraphernalia of petty corruption, did they ever think of their constituents who were paying for all this? Pensioners who can’t afford to heat their homes, let alone furnish them. Of course not. They were too busy comparing themselves to  people who were earning much more. 

   Entitlement should be the eighth deadly sin. It is also what drove the City of London mentality in the boom.  Bankers believe they have a kind of divine right to fabulous rewards - to bonuses. Bankers have an unshakeable belief in the virtue of personal enrichment - that it in some way enriches society if ‘wealth creators’ are given whatever they want.  If they think at all about the rest of society, they probably believe they are doing good by paying taxes - those who still bothered to do so - and by attending charity dinners.  

    This is why they have returned to the bonus culture so shockingly, so recklessly, only a year after they had become public enemies for plunging the country into recession.  It is of course simply outrageous that bankers, who have been bailed out with public money, should be stuffing their pockets with it.  It is only because of the £1.2 trillion rescue - the Bank of England’s own figure - that bankers are in a job at all, let alone awarding themselves million pound bonuses.  Everyone knows this, but no one does anything about it, except condemn their greed.  But Bankers don’t care what people think of them anymore. 
 

   And, increasingly, nor do MPs.  They’ve become like Millwall supporters: no on likes us, everyone hates, and we don’t care.  Last week we saw MPs on TV saying they would rather go to court than pay back any expenses. Well, it might come to that.  The more they try to clean up their act, the worse it gets.  Handing the whole expenses affair to the ‘safe pair of hands’ of Sir Thomas Legg, a retired civil servant,  was supposed to draw a line under the scandal. But it has made it worse.  Sir Thomas’ demand for retrospective payments is arguably  contrary to natural justice - not that anyone thinks MPs deserve justice.  His letters have also been full of errors, and seem to have targetted small fry, fiddling a few hundred, instead of exposing the real parliamentary villains who have been making tens, even hundreds of thousands out of their second home allowances. 
   

  Like the original redacted expense accounts - which blanked out anything that MPs didn’t want revealed - the Legg audit has been a PR disaster.  The voters are outraged and the whole expenses scandal has been given a fresh pair of legs.  Parliament has been left morally bankrupt, just as the nation is plunging into insolvency, and a banking kleptocracy in the City is stealing what is left of the family silver. No one has any authority left - not parliament, regulators, ministers.  MPs are so shame-faced and compromised by the expenses scandal that they are in no moral position to challenge the greed of the bankers. How can the prime minister take on the spivs and speculators in the City when he has had to pay back £12,000 in fiddled expenses?  The moral implosion in the City of Westminster has let the City of London off the hook.  I’d say it couldn’t get much worse than this - except that it probably will.   

2 comments:

Mr. Mxyzptlk said...

Iain

Like ..Millwall supporters...hardly that is a vicious slur compared to your average banker and MP most Millwall supporters are kind and saintly generous to a fault


'it couldn’t get much worse'

synthetic indignation there Iain its always been worse..........

and finally you are a Journalist

tris said...

Of course nothing will be done.

As usual with Britians it's what we WON'T do.

We'll not vote. Even more than at present, we'll sit on our hands on polling day. That will shake them to their foundations now, won't it?

Half the nation cares more about who wins "The X Factor" or "Strictly", and most of the rest seem to be obsessed with a middle-aged Z-list celebrity and her has-been singer ex-husband, both much more famous for their failed marriage than for anything else they ever did.

So the MPs will get away with it because apart from a few indignant articles in the papers, nothing will happen.

Brown has already promised to curb the bankers' greed and, as we see from your article has proved himself to be as effective in this field as in every other.

They said "yes Mr Brown" and then got on with the serious business of divvying up our bail-out money.

Well, who's going to bother much about the demands, or even pleas, of a has-been washed-out failure of a prime minister who has been on the fiddle himself?

What a bloody mess of a country.