Two-faced Cameron on bonuses

Just like with NHS. Two-faced on bankers bonuses

The utter hypocrisy over the Conservatives over bankers bonuses has been exposed over the last two weeks as once again the two-faced Cameron says one thing and does another.

We had it today over Europe where he said one thing in November and did the total opposite today. Though I welcome his move to accept the fiscal union he is trying to pretend and distort the truth; he has capitulated, it was predicted and he should have the guts to admit it.

Of course he gets away with it...

Just rewind back only two years to February 2009 and Cameron said that bankers "needed to wake up and smell the coffee" as he urged ministers to tear up existing bank executive contracts at semi-nationalised banks to prevent them receiving any bonuses.

The Tory leader said it was not acceptable for them to receive bonuses since the firms would have collapsed altogether but for the government bail-out.The clampdown on bonuses should not just apply to the board members or the executives that had failed the banks, but had to extend to "the huge swathes" of senior executives, even if they had personally made a profit for the bank.

"In every company, if the firm does badly, there are fewer bonuses for everyone, because everyone has to work together to get that firm out of a hole"

Cameron even argued at the time that the government, as majority shareholder in some of the banks, could simply force the issue. In those banks that the government did not own, ministers were in a position to apply "some strong moral persuasion", since they were dependent on government credit guarantees.

Cameron said that in principle he wanted to see future bonuses linked more closely to share price rather than company profitsHe even said

"it is infuriating to listen to all this stuff about 'existing contracts must be kept to'. There would not be any contracts, there would not be any salaries, there would not be any bonuses if the taxpayers had not stood behind some of these institutions. The bankers have got to have one of those 'wake up and smell the coffee' moments. The government appears to have been asleep on the job. It is not so much that they shut the door after the horse has bolted. They have shut the door after the horse actually won the 3.20 at Uttoxeter."

Fast forward to 2012

Whilst it is welcome news that Stephen Hester has decided to wave his bonus, this was nothing to do with the Tories.

Up until the weekend Downing Street insisted that the government’s hands were tied because of a deal signed by the previous Labour government, which meant RBS shareholders could only advise on bonuses, not veto them.

This is of couse a complete fib. Multi-year guarantees are illegal and all bonuses are discretionary, as they themselves only admitted when they said that the bonus has been awarded by the board. To imply that he was getting a fat bonus because of the previous government is and was desperate.

RBS is still failing to support businesses properly despite signing the Project Merlin deal with the government to help boost growth. In addition, RBS’s shares are worth less than when Mr Hester took the job in November 2008, after Sir Fred Goodwin was forced out.

Yet, Cameron did nothing; even though he said in 2009 he would act.

Meanwhile, Chancellor George Osborne said the only alternatives would have been more expensive for the taxpayer. He said ministers could have blocked the bonus only by tearing up the “arm’s-length” arrangements drawn up when RBS was saved from collapse in 2008 and taking over day-to-day operations.

“Either there would have been a much larger bonus, of the kind he would have got a few years ago, or the British government would have had to take over complete ownership of RBS and over-ruled the board, and I think that would have cost the tax-payer more as well.”

Where was George Osborne in 2009!?

Subsequent to this position Labour tabled an emergency motion on the bonus and Stephen Hester decided to wave the bonus.

Labour has shown leadership once again; Cameron has been exposed as two-faced.