What they’re saying about Bob Diamond and bonuses

WAS YESTERDAY the moment when reality intervened and the public was finally forced to accept that, as much they might despise the bankers, there is absolutely nothing that can be done to tame them?

The coalition government let it be known they have effectively given up on attempting to regulate bonuses. Downing Street announced there would be no attempt to renew last year's one-off tax on bonuses, with a spokesman saying David Cameron would not "micro-manage" the banks.

Instead, Business Secretary Vince Cable and Chancellor George Osborne, who before the last general election promised to cap bonuses, are attempting to rescue the situation by asking the banks to lend more to small business and first-time home buyers.

The coalition's stance was not helped by the unapologetic performance of Barclays Bank CEO Bob Diamond when he appeared before the Treasury Select Committee yesterday.

Despite repeated requests from MPs on the committee, the American banker refused to waive his bonus for 2010 - thought to be in the £8m region - saying it was a private matter for him and his family.

And he appeared ungrateful to the taxpayers who have provided the guarantees that allowed his bank to survive the financial crisis, saying: "There was a period of remorse and apology for banks and I think that period needs to be over."

Nor did he take the opportunity to thank British taxpayers directly: "We are very grateful to the central banks. We are thankful to everyone," he said in what was generally seen as a performance worthy of a politician.

WHAT THEY'RE SAYING ABOUT THE BANKERS

Alex Brummer, the Daily Mail: "Bob Diamond will have won few friends for his performance before the Commons. Indeed, his declaration that the period of 'remorse and apology for banks' needs to be over shows stunning arrogance.  It is for our elected governments and regulators to declare when the period of penance is over for the banks - not Diamond."

Peter Hoskin, the Spectator: "It's a case of the Tories getting one over the Lib Dems – and particularly Vince Cable – by not pushing down with more taxes on the City. But that, I suspect, is only half the story. The other half is that the coalition never had much in their armoury, but harsh rhetoric, in the first place. If they want the banks to start lending to business again, then their most substantial hope has always been a trade-off over bonuses."

Editorial, the Guardian: "Maybe, just maybe, it is all a cunning plan to under-promise and over-deliver... Don't bet on it though. The sinking of Vince Cable's star has emboldened the City's belief that it can do as it pleases, and strengthened the hands of those ministers who are inclined to agree."

Simon Jenkins, the Evening Standard: "Cameron threatened to ‘veto excessive bonuses’ but he does not mean it. He owns half these banks. Why does he not do what he claims to want, which is switch the bonus pot, lock, stock and barrel, into a small business lending scheme?"

Benedict Brogan, the Telegraph: "[The government] knows that its only instrument was moral pressure - it cannot micro-manage individual bonus levels. The threat to make banks name the bankers who receive more than £1m rings hollow somehow. I’ve pointed out previously moments when Mr Cameron has found himself stuck between a rhetorical position and hard facts. This is another one."

Andrea Leadsom, Conservative MP on the Treasury select committee, in an exchange with Bob Diamond: "Over Christmas I read my seven-year-old The Emperor's New Clothes... There is no evidence that banks will move. It's extremely disappointing, you are in denial about the taxpayers' support for you; denying a lack of competition in the industry; you're denying customer satisfaction; you're denying the lack of support for small businesses... the emperor is wearing no clothes."

Robert Peston, BBC business editor: "Although Mr Diamond may say that slashing bonuses would harm the bank and its owners, he has some work to do to prove that paying those bonuses benefits anyone much but the recipients."

Editorial, the Evening Standard: "Despite an articulate performance, [Diamond’s] refusal to thank British taxpayers for bailing out the banking system will annoy many people, particularly coming as it does on the day that the Financial Services Authority has fined RBS and its NatWest subsidiary £2.8 million for shoddy treatment of customer complaints."

Ann Treneman, the Times: "People say he is brash. No less an expert than Lord Mandelson has called Bob the ‘unacceptable face of banking’. But yesterday Bob was not brash. He was precise and controlled. He arrived at the packed hearing room, arranged his papers just so and placed his pen on top at an exact angle. Only his smile, big and American, whiter than white, was flashy. He rarely deployed it." ·