Though Cowards Flinch

It has been revealed, while Chancellor Osborne faces accusations of being soft on bankers, that 50% of Tory funds come from the City (£11.4m to the Tories election war chest in 2010). In a few days time we can expect to see a think-tank revelation that the Pope is a Catholic and a government report looking into the facts about bears shitting in woods.

But that aside, there are enough reasons to suggest the government is not acting fast enough, or effectively enough, to bring down pay differentials or save jobs – and one major example of this has been breaking headlines these past few days.

Lloyds Banking Group come under fire yesterday for axing another 200 jobs – this time in group operations, general insurance and wholesale divisions – which tallies up the total job losses to 26,000 since the recent merger of Britain’s biggest retail bank with HBOS.

One of the areas which will be most affected by this is Leicestershire, where up to 1,000 jobs will be axed over the next four years, including 600 in the next 12 months, in an attempt to make savings of £100 million.

Jobs are not being created in vulnerable areas meaning dole queues will only get longer.

All the while, it has emerged that Lloyds Banking Group Chief Executive Eric Daniels – who is due to step down next month – is to receive a bonus package of just under £1.5m – worth 225 per cent of his £1.035m salary.

In May 2010 Will Hutton was asked by David Cameron to look into cutting top public sector pay, and yet it’s quite clear that disparity in salaries is a cross-sector problem. Another bone of contention here is bonus pay. Cary Cooper of Director Magazine recently said:

… if bonuses, pension contributions and other benefits are not taken into account, there will be a big loophole available for lawyers and accountants to fill-and they will take advantage.

There are two main points to draw upon: if the government doesn’t want to seem soft on banking or on bonuses it ought to buck up and support a high-pay commission across the board, factoring in bonuses which could be used as a way around efforts to reduce high pay ratios.

The second point is that while a high-pay commission may be good, what use is it if people find themselves losing jobs. It is beyond contempt that Eric Daniels will receive millions while many Lloyds employers go jobless. The government has a lot of work to do on these issues, but at the moment it doesn’t look up to the challenge.