Socialist Worker

Bailed out bank RBS stuffs pockets of top managers

by Dave Sewell
Issue No. 2338

The Libor scandal

The Libor scandal

State-owned bank RBS has revealed plans to pay a quarter of a billion pounds of bonuses to its investment banking arm.

This is the same bank that was fined around £500 million last month for conspiracy to rig the Bank of England’s Libor rate.

RBS head of investment John Hourican is expected to be forced out over the scandal, in order to appease the Financial Services Authority regulator.

But he’s due to grab £4 million in shares before he goes.

That’s enough to pay the wages of 190 nurses for a year. The total RBS bonus pool could pay for almost 12,000.

Hourican got an even bigger windfall last year, when the bank was making thousands of junior staff redundant, on top of a £3 million salary.

RBS got a government bailout worth more than £20 billion in 2008. MPs have admitted that we will never get all of that money back.

But while top bankers are laughing all the way back to the bank, the economic misery deepens for the rest of us.

Britain’s economy shrank again over the last three months, to a lower economic output than it had in 2012.

It is on course to drop back into official recession for the third time since 2008.

This would make the current economic crisis a “triple dip” recession.

But the second dip only ended on paper—the cash the government threw at the Olympics artificially skewed the figures for the middle of 2012.

For most of us the “recovery” never started.

Youth unemployment has been rising steadily throughout the crisis—even during the odd bits of growth.

And there were 6,045 suicides recorded in Britain last year—the highest rate in a decade. For men aged between 30 and 44 it is the highest rate since 1986.

Chancellor George Osborne claimed to have found the “engine for growth” in the form of high speed rail links. These will cost £32 billion and take 20 years to deliver.

But this is an expensive distraction that will have no effect on ordinary people’s lives.

And the MPs’ treasury committee this week lambasted Osborne for hiding behind the forecasts of the Office for Budget Reliability.

They said that this office of made up numbers set up by Osborne in 2010 was “biased to over-optimism”.

Osborne has no answers.

But even his own side can see that the ever more brutal cuts the Tories impose aren’t working.

Meanwhile bailed out banks spend our money to pay their bonuses and fines. There’s clearly no shortage of cash out there.

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Fri 15 Mar 2013, 15:32 GMT
Issue No. 2338
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