Government by the wealthy, for the wealthy

If anyone had doubts as to where the Cameron government’s sympathy lay, the events of the last few days amply demonstrate that this is government for the few, not the many.

The row over bonuses in the banking sector saw battle lines clearly drawn: the public on one side, annoyed that they see living standards falling while the industry responsible for many current problems continues to over-reward poor performance.  On the other side, Cameron sent out an army of ministers to explain why the world would go to hell in a hand cart if Stephen Hester wasn’t given shares to the value of £963,000.  Just as he did with Rupert Murdoch last summer, Ed Miliband chose to stand with the outraged against the rich and powerful.  More kudos to him for that, but shame on Ian Duncan Smith, who claimed that the banking world would be plunged into some kind of “chaos” (his word, not mine), if the Government started to interfere with the pay arrangements of the sector’s higher echelons.  I can just imagine it.  They might all threaten to stop lending money to individuals and small businesses, preferring instead to twist the Government round their little finger.  Pretty much as they did a year ago with ‘Operation Merlin’.  It’s worth remembering that current Government policy has led to nurses and teachers having to work longer for less reward.  It has also led to bankers choosing whether to add a £963,000 bonus to their £1,200,000 salary. 

After Miliband threatened to force a Commons vote on the issue, Stephen Hester climbed down.  Chillingly, the Government then reiterated their refusal to interfere with any other bonus payments RBS choose to award.  It’s worth remembering that the financial sector donated £11.4 million to the Conservative Party last year.

Another move by the Conservatives, wholeheartedly supported by the LibDems, has been to alter the arrangements for payment in the legal system.  Under new legislation, the present ‘No Win, No Fee’ system will be altered.  As things stand, all costs in a successful action brought under such a deal are borne by the guilty party.  So, for instance, if I beat you up and you bring a successful civil case against me, I have to pay all of your costs.  Under the new proposal, you would have to pay a percentage of your lawyers costs for the pleasure of successfully suing me.  I’ll be better off, so if you don’t mind, I’ll beat you up next year if it’s all the same with you.  Why change the current arrangements?  Well, I have a sneaky suspicion that some law firms are not particularly happy with the level of damages that courts are setting.  As I am not a particularly wealthy man, the court cannot fine me millions for beating you up (apologies, that’s twice I’ve done it now).  A fee taken as a percentage of damages related to my circumstances would not be huge.  On the other hand, if you have to pay some of your costs, it would be more worthwhile for the lawyers to only pick wealthy clients.  If you are wealthy, the law firm could make sure they get their pound of flesh from you whatever the outcome of the case.  If you can’t afford to pay their fees then I guess it will be even cheaper for me to beat you up (I really must stop doing that).

All in all, it has been a mixed few days for the wealthy and the powerful.  It looks like lawyers will get away with charging victims of crime rather than the perpetrators, but it’s not great news if you’re a money driven Chief Executive of a state owned bank.  Perhaps Ed Miliband will choose the legal system as his next moral crusade.  Given his success in forcing the Leveson inquiry and making RBS climb down, victims of crime had better hope he does.

liamstubbslabour@hotmail.co.uk
Twitter - @liamstubbs
Facebook - Liam Stubbs Labour