Cameron Silent As Tories Rally Behind The Bankers
As the election approaches, influential top-level Tories are rallying behind the bankers again while David Cameron — who promised a “day of reckoning” with them when the crisis was at its height — remains silent.
Michael Spencer, the conservative party treasurer – and chairman of the world’s largest interdealer broker ICAP — claims that action to defer bankers’ bonuses, or raise capital requirements on banks, could make the UK less competitive.
“What is potentially damaging to London is if the regulatory burden becomes too burdensome.” [CBI/PWC financial services survey, 15 January].
London Mayor Boris Johnson claimed on the same day that ‘”around 9,000 bankers may leave the City following a tax on bonuses over £25,000 and a 50p tax rate for top earners.” [BBC News, 15 January].
Yet Johnson’s wild claims have been contradicted by his own economic regeneration chief, Harvey McGrath (head of London Development Agency and chair of Prudential) who said “he had not heard of any firms planning to leave because of the one-off levy” [Evening Standard, 13 January 2010].
Johnson has changed his tune: as recently as 19 October in a Daily Telegraph column, he attacked bankers for appearing to be “waltzing off with a song on their lips and their hands in their pockets – at least, their hands would be in their pockets if they were not stuffed with money.”
And why does David Cameron keep so quiet these days about the bankers? In a speech to the Tory Conference on 30 September 2008 he said that it was easy to see why people were so angry with bankers: “They paid themselves vast rewards when it all was going well and the minute it all went wrong, they came to us to bail them out.” Cameron said that the priority at that time was to focus on stabilising the financial system but he promised that “there will be a day of reckoning”.
The only sound of reckoning now is the chink of donations to the Tory party from the City — particularly from the hedge funds who are busy promoting a new financial bubble.
According to a Daily Mirror investigation [6 January] the City put up almost half of £13.5 million raised by the Tories in the first nine months of last year.
One of the biggest donors was Stanley Fink, former chief executive of hedge fund Man Group. Fink was appointed last year as the Tory’s election fund manager, working alongside Tory treasurer Michael Spencer. He said he wanted to raise £40 million pounds in order to “blow them [Labour] out of the water” [Daily Telegraph, 16 January 2009].
No prizes for guessing where the big money is coming from to bankroll the Tory campaign, or that if there were a Tory government the “day of reckoning” with the bankers would be postponed for ever.
Cameron and Inequality – Has Cameron missed the point?
On Monday 9th November, Conservative Party leader David Cameron delivered the Hugo Young Lecture at King’s Place in London. Polly Toynbee was there and in the Guardian she writes:
[T]he heart of his [Cameron's] message lies in his view of inequality. Cleverly, he refers to the ground-breaking research by Richard Wilkinson and Kate Pickett in The Spirit Level. In one breath, he acknowledges their proof that “the more unequal countries do worse according to every quality of life indicator.” But in the next breath, he offers a complete non-sequitur that contradicts all The Spirit Level’s findings: “That doesn’t mean we should be fixated only by a mechanistic objective like reducing the Gini co-efficient.” Of course not. You could not be a Conservative if you thought you should narrow the gap between top and bottom. Instead, he says “focus on the gap between the bottom and the middle.” Of course! That is exactly what his inheritance tax policy is designed to do – leave the top well alone.
Read Polly Toynbee’s complete article by clicking here
Click here to read “The Riddle of Lord Ashcroft”
Click here to read more about David Cameron’s Mortgage Expenses claims
Tory Leaders On The Record: Against Regulation, For Unfettered capitalism
DAVID CAMERON
(1) Speech at CBI Interactive conference 8th Nov 2005 (when still candidate for the party leadership): he denounces regulation — including regulation for the benefit of health and the environment, and he promises a campaign for capitalism:
“For too many people, profit and free trade are dirty words.
The consequence has been a massive rise in risk aversion, a willingness to concede power to the state to try and take risks out of life.
Health risks. Safety risks. Inequality risks. Security risks. Environmental risks. An ever-increasing burden of regulation applied by modern states and their agencies.
Promoting wealth creation means changing the climate of opinion so that politicians and bureaucrats who argue for measures that damage competitiveness are less likely to succeed.
In short, we need to campaign for capitalism.”
(2) Speech, “The new global economy” 22nd June 2006 (Cameron claims Tory credit for de-regulation, and says it is one of the keys to success).
“The growth of the modern City as we know it was shaped by three critical Conservative decisions.
First, because of our attractive tax regime, in the 1970s, US bonds were traded in London – the so-called ‘euro-bond’ market.
Then the big bang of the 1980s removed a huge swathe of regulation that allowed the City to expand and removed restrictive practices.
And by being open to competition from banks from anywhere in the City. The success of the City helps to drive the UK economy and provides huge benefits for our wider society.
The lessons from the City are clear. Low tax. Low regulation. Meritocracy. Openness. Innovation. These are the keys to success.”
http://www.conservatives.com/News/Speeches/2006/06/Cameron_The_new_global_economy.asp
GEORGE OSBORNE
(1) Speech to British Venture Capital Association, 13 March 2007 (Osborne applauds venture capital’s ingenuity in exploiting tax concessions – and defends their bonuses against Labour criticism).
“…private equity is a beacon of British excellence.
The importance of your contribution to our economy is, I believe, rightly reflected in the tax treatment that you receive.
Of course, all companies face the same tax code, and other companies could access the capital gains taper relief, and tax relief on debt interest.
But we know that in practice you are best placed to make the most of those reliefs.
Of course, that tax treatment is under attack as never before.
Under attack from the trade unions who contribute 90 per cent of the funding to the Labour Party.
And under attack from the Cabinet members who need their votes in the party’s deputy leadership election…..
Harriet Harman wants to stop what she calls your “excessive, ridiculous bonuses”.
Peter Hain called your bonuses “grotesque”, and raised “serious concerns” about private equity. And he’s in the Cabinet.
You should not stay silent. You should respond to these attacks.”
http://www.georgeosborne.co.uk/
(2) Speech at LSE, 11 January 2008 (With the credit crunch upon us, |Osborne still believes in “far-reaching de-regulation”).
“In the 1980s, Margaret Thatcher’s programme of deregulation and business tax reductions freed Britain to compete. She liberated the supply side and let demand follow.
We have been living off the benefits of that revolution.
But a supply side revolution is not just a one-off that happened twenty years ago. To compete in the new global economy, we need constant reform to attract business from abroad and help domestic companies to grow.
Recent visits to Eastern Europe, Ireland, India and China have reinforced my belief that we need a second supply side revolution to once again catch up, build the environment for enterprise, and become the best place to do business in the world.
We have put forward a radical programme of school and welfare reform, because improving skills and ending dependency are crucial economic tasks in the modern world. The report of our Economic Policy group last year set out proposals for far-reaching deregulation.The independent Tax Reform Commission I established showed how we can simplify our business taxes, and we are working with PWC and Grant Thornton on how we achieve that.
These are the long term reforms to our economy that we will make and I will want to be judged on. My ambition is nothing less than to make Britain the most competitive major economy in the world so that the benefits of globalisation are felt by every citizen, and we see living standards in our country rise not fall.”
