Still out of credit

For all their rhetoric on lending, politicians are not influencing banks as they claim – and as they need to. The problem at RBS is not Easingwold-educated Stephen Hester’s salary and bonuses – distressingly out of touch as they are – but a state-owned bank not doing what the state needs.

The unsettling sight in recent weeks of political leaders competing to show the most indignation at Mr Hester’s pay package was shameless opportunism at its worst. There was no such furious outrage from Ed Miliband when he was part of Gordon Brown’s Cabinet that signed off the salary and bonus arrangements. And, for all their prevarication, the present Government could have stepped in, as the majority shareholder, and halted Mr Hester’s bonus.

Not only is such naked hypocrisy of little credit to the mud slinging protagonists – but, far worse, it is creating a war between Parliament and the banks at a time when they need to be working in harmony.

Unemployment is rising relentlessly, the property market stagnant – possibly set to fall back further – while growth in the private sector is near non-existent, and certainly nothing like the levels required to fill the chasm left by the dramatic contraction in the public sector.

In such perilous economic times, cheap headline grabbing attacks on wages are not just undignified, but they are potentially very damaging to our economic future. Whether Mr Hester is earning £9,000 or £900,000 a year will not change the economy. What will is the ability of the banks, particularly those propped up by taxpayers, to finance small businesses where appropriate.