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17/08/2010 - City celebrates whilst Scotland is shafted

OUR article Despite the Profits, Bank Staff and Small Businesses still being squeezed described how the Lloyds Banking Group and Royal Bank of Scotland have reported profits of £1.6 Billion and £1.1 Billion respectively.  The Chief Executive of Lloyds, Eric Daniels, was very happy with this turn of events.  He predicted a rosy future: “We believe the next several periods will be even better.  We have very good momentum.”

If Mr. Daniels is a happy man, the President of Barclays – Bob Diamond - must be over the moon.  For his banking group has just seen a 44 per cent rise in profits.  In the half year to June, Barclays made £3.95 Billion.

As if to demonstrate the power of the banks, “over 1,500 of the City’s finest” attended the recent 50th anniversary bash of the Square Mile, edited by Martin Deeson.  It describes itself as a magazine which is an “indispensable read for City Executives.”

Those who attended the party worked for the likes of Barclays Capital, JP Morgan, HSBC, RBS and Lloyds.  Held in Devonshire Square - in the City of London - guests “basked in the glory of the City and those who work in it.  Revellers enjoyed free drinks and a wealth of entertainment including fire-breathing dancers, burlesque performances and a casino, while American Express Centurion VIP guests quaffed Laurent Perrier champagne.”

Speaking to the Sun (6 August 2010), commodities trader George Fernandez said that the banks were awash with money.  He said: “Last year was very hard but it’s much better now.  We’re back to our old ways.  City bonuses, going out, champagne.”

Eliot Giles, a City recruitment consultant, also confirmed that the City was going back to “big spending” as the bonus culture returned.  (This Is Money 6 August 2010).

Asked by the Daily Mail (5 August 2010) if he found the party, and particularly its timing as ‘tasteless’, the Square Mile editor said “While everyone else is busy bashing bankers, we're throwing a big bash for them instead.”  He also noted how some bankers are still struggling in the current economic climate: “They don't all earn a million quid - some are only on £150,000 plus bonuses.”

However, the fact that some bankers have to survive on such a pittance will come as cold comfort to thousands of public sector workers in Scotland.

 

CUTS IN SCOTLAND

That’s because it’s feared that around 60,000 jobs could go via spending cuts.

The shock news was contained in Scotland’s Independent Budget Review - IBR – released at the end of July.  It was commissioned by Scotland’s ruling SNP administration and took five months to research.

Taking into account Con-Dem moves to reduce the UK’s £155 Billion annual deficit, the Review – according to the Daily Record of 30 July 2010 - “suggested the Scottish government should consider cutting public sector employment by between 5.7 per cent and 10 per cent by 2014-15, which would see a loss of up to 60,000 jobs.”

Although the Con-Dem government claims it will spare the NHS any cuts, the IBR says that ring-fencing an area such as health would leave other departments in Scotland facing budget cuts of more than 20 per cent.

 

SO FAR SO BAD


So far, so bad - but there’s more.

According to the Record other proposals to save cash “include introducing tuition fees, hiking council tax, freezing public sector pay, ditching quangos and scaling back the free bus travel concession scheme.”

If this happens, the vast majority of the progressive social policies that make Scotland unique will be scrapped in one hit.  And, as things stand, Holyrood will not even be able to think about re-introducing them until the 2015-16 financial year.

Some folks have joked that this attack on public services represents ‘pay back time.’  Scotland is, in effect, being shafted.  (The Tories were wiped out and left with only one MP after the General Election in May.  David Mundell held on to his seat of Dumfriesshire, Clydesdale and Tweeddale).

At first glance this may be a little far-fetched, but stranger things have happened.  It’s also worth remembering the old saying that ‘there’s many a true word said in jest.’