There was a telling moment, someway through Tony Blair’s second term, when he appeared on the BBC’s Newsnight and made his feelings clear about people earning mega-salaries. Jeremy Paxman asked him if he would consider capping top earners, and with that ‘I’m just an ordinary bloke’ kind of look, Blair smirked and grunted a little and indicated that he wasn’t the least bit interested in capping earnings, whether that was the silly-sized earnings of footballers and celebrities or the salaries and bonuses in the city. Incidentally, I don’t believe his, then, second-in-command was too bothered about it either.
Fast forward to 2009 and Gordon Brown has now come over all “socialist” and thinks things like city bonuses are pretty obscene when everyone else has pulled their belts to the last notch. Even Tony Blair’s opposition clone David Cameron thinks it’s not on for people to be awarded fat bonuses (especially if it is taxpayer funded, though the possibility is that a hidden gripe over taxation in general is lurking here).
During the madcap boom years, everyone knew that city bosses and various employees were earning salaries and receiving bonuses that were out of all proportion to any actual useful activity other than company profits. The economy that Labour presided over engineered a system that saw mega-wealth being produced and largely going into the pockets of the few, whilst all the same problems of funding the public services and ending poverty, remained fairly static apart from the slight rise in public spending that generally characterises a Labour government. Student tuition fees were introduced, the NHS still has its funding crisis, schools still have their funding crisis, yet growth and wealth was skyrocketing via the city. So where did it all go?
Whatever the answer is, the rhetoric and the moves by both Barack Obama and Gordon Brown to set to work on the mega-bonus culture and the obscene salaries, is just too late. The economy has already dropped, the depression has already arrived. If any changes are put in place to hamper the rampant greediness in the financial world (and in an era of neo-liberal orthodoxy this hardly seems likely), that might help moderately for the future, but as we stand, it is like closing the gate after the horse has bolted.