It is so obvious that if MPs spouses and children are not only banned from working for them, but for other MPs as well, they will simply do a bit of wife swapping to keep the money rolling in. Wives will work for MPs other than their husbands. Whenever Guido argues that it is nepotistic it is often a step too far for political audiences. They invariably argue it is (a) cost effective (b) conducive to family life (c) they never abuse the system / underpay themselves.
Guido counters that it is too open to abuse, that it goes against well established civil service principles that hires should be selected openly and on merit. How are taxpayers to distinguish between those who abuse the system and those that don’t? This sort thing would not be tolerated by shareholders as a matter of course, where it does happen in the private sector (Murdoch’s News Corp for example) the family usually has a significant stake in the business. In a democracy, politics should not be a family business.
Guido thinks that regrettably, those who have abused the system have made it necessary to ban MPs’ partners and children from working in parliament. The Kelly report should recommend an end to the practice. The Shadow Kelly Report certainly took the tough line.
Mark Littlewood is the former LibDem head-of-spin who has become the chief wonk at the venerable Institute of Economic Affairs, the directorship of which comes with a (big for wonkland) £100,000 pay package. There will be organic champagne corks popping in Cowley Street, because as an educational charity the trustees of the IEA insist on staff severing party political links. Littlewood until now led the Orange Book pressure group Liberal Vision, a classical liberal thorn in the side of social democrats within the LibDems. Mark will also have to tear up his LibDem party membership card before he starts at the IEA in December.
Chain-smoking Littlewood’s CV includes time campaigning at Liberty and co-founding NO2ID. He is an across the board libertarian on social and economic issues. The board of the IEA clearly wanted someone who could raise the media profile of the original Westminster think-tank. With a change of government coming, the call for dusty policy papers read only in academia to be replaced with agenda setting policy ideas became widespread amongst IEA donors. The centre-right think-tank sector is more widely enjoying a burst of increased funding and activity as the expectation that their ideas will be sympathetically received in government increases. The IEA’s revival will make the market for ideas for the next government more exciting than at any time since the early 80s.
George Osborne is off to Canary Wharf this morning to make anti-Banker noises at the Reuters HQ. His speech will call for the successful to be penalised as an act of collective punishment for the mistakes of senior management. No word as to what punishment the Bank of England Governor and Chairman of the FSA will face, Guido suspects none.
The argument is that now the government is the owner of banks it should set the pay and conditions of staff to satisfy the democratic will. Shareholders are of course entitled to exercise control. However if Guido was a proprietary trader at RBS contractually promised 10% of the profits he wins for the firm, only to be told that the Chancellor wants to breach the contract and unilaterally cut the bonus, Guido would first call his lawyer. Secondly, Guido would start looking at renting office space in Dubai or another financial centre with a zero rate of income tax.
Bonuses are taxed, so next year half the £6 billion bonus pool could be lost to the exchequer. The successful traders who make profits for their firms help the banks re-build their balance sheets, why drive them overseas? Punishing successful City folk after the event is a displacement activity when they should be punishing those responsible for the crisis – central bankers, regulators and those few bankers who actually had direct responsibility for the crisis.
Bonuses are a form of deferred performance related pay, no profit, no bonus. The easiest way to clamp down on bonuses is to have a moribund economy…
UPDATE : Labour’s Lord Myners, who really ought to know better, is now (Thick of It style) pushing a rival plan this morning. Forcing investment banks to reduce their fees for capital raising. He seems to want to further erode bank profits. How are the banks expected to rebuild their balance sheets?
The Mail thinks Tony McNulty could be suspended from parliament for using his expense claims to house his parents in a second home in his Harrow constituency only 11 miles from Westminster and 4 miles from the home he and his £225,000 a year quangocrat wife live in. On past performance Guido is not so sure. The Committee on Standards and Privileges has so far administered only the gentlest of slaps on the wrist to the Wintertons and Jacqui Smith, both beneficiaries of £100,000 plus scams. Guido has almost given up hope of porcine politicians being ordered to repay their ill-gotten gains. Do the punishments really deter the crimes?
Another Sunday, another Sunday Times revelation of a peer pretending not tol live mainly in London.
A close friend of the prime minister who lives with her husband in a £1.5m house in London has claimed £230,000 in expenses by saying a flat in Glasgow is her main home. Baroness Goudie, a Labour donor and fundraiser, has lived since childhood in London where her two sons grew up and her husband works as a leading barrister. However, the baroness tells the Lords her main address is 400 miles away in a Glasgow apartment block. A close neighbour said she had not seen Goudie there for some time.
With the Lords establishment ruling that the Sunlight Centre’s complaint against Lord Rennard could not be upheld, because the Lords had no definition of main residence, Guido is sceptical that a penny will ever be repaid by Lords for lying about their main residence. So far not one single penny has been shamed out of these troughers of the realm.