How short City memories prove to be!

Financial sector apologist starts wingeing at David Cameron.

Late last year, David Cameron went on the record and questioned why the people who had contributed to so fatally undermining the financial credibility of the City, should not face prosecution for criminal offences.

It was a very brave statement for the leader of the Tory party to make, but it demonstrated how sincere the new leaders of the Conservative party are in determining that when they are in charge, this situation will change.

It has long been a tradition within the financial sector that no sooner does a public official make a statement which runs counter to the continued interests of the financial sector’s adherence to the status-quo, then some member of the financial establishment can be dredged up to pour cold water on the censure, and to make an appeal to higher loyalties for every interested person to adopt a single policy line opposing the proposals.

Thus it is with David Cameron’s observations on City wrongdoing and his very strident attacks on City bonuses.

As reported in yesterday’s Evening Standard, Mr Cameron has been apparently challenged by someone called Hugh Osmond, described as the ‘Pizza Express entrepreneur’, who claims to be dismayed by the Conservative leader’s behaviour during the economic crisis.

Apparently, the Pizza slinger’s ire has been aroused by David Cameron’s response because he doesn’t think it ‘…shows a real attempt to understand either the genesis of the crisis or how to fix it…’

So, for Mr Osmond’s benefit I will tell him the answer that apparently only he doesn’t know. The crisis was caused by greed, mate, pure and simple greed!

It seems a little strange that this explanation has to be made to a man who as recently as 2008 was so mean he only paid his staff the minimum wage, and then charged them an 8% surcharge for reimbursing them for any tip paid to them on a credit card! He will tell us he was obliged to do this by law, but it didn’t stop a strike at his Wimbledon branch, part of a wider campaign to demand that all restaurants distribute service charges and restaurant tips fairly after a member of staff was sacked for speaking out against the 8% levy.

Mr Osmond clearly believes he has a right to dictate policy to David Cameron, because last year he gave £84,000 to the Tory Party. That’s roughly the sum of money equivalent to the 8% surcharge paid by 350 customers per restaurant, throughout the entire year, or 1 customer a day, give or take, so it may well be thought that some of that contribution is coming straight out of the sweat of his employees, to say nothing of their pockets!

Mr Osmond has highlighted David Cameron’s attack on the greed culture as an example of ‘…populism taking precedence over proper understanding…’ Clearly not a popular move with Mr Osmond, but he has a weird way of determining what the proper understanding is, by likening it to another area of financial payments equally highlighted for their strident greed, their lack of any logic and their complete absence of value.

He states; ‘…Banker’s bonuses are like Premiership footballer’s wages…’

As if this staggering insight was not enough he continues;

‘…You can have a view that they incentivize the wrong sort of behavior…’

Yeah, well right so far pal,

‘…but they’re not at the root of the issue…’

Well help me understand this better Mr Osmond, just what is at the root of the issue? We pay footballers far too much for doing very little, and we pay bankers the same, what is it about that equation you find difficult to understand!

The real point is that Mr Osmond is entirely irrelevant as far as this discussion is concerned. His remarks, and other’s comments must be put in context. Today’s FT reports;

‘…The devastating critique by Mr Osmond, who donated £84,000 to the party last year, represents the first public backlash by Tory supporters against Mr Cameron’s handling of the downturn.

But it reflects much wider unease in business about the substance and tenor of Tory attempts to wrest political advantage from the crisis. Another prominent Tory supporter said the party leader was getting sucked into a “ridiculous” Westminster game of “banker ¬bashing”.

The Tories’ many allies in the City say they understand the political rationale for the party’s attempt to outflank Gordon Brown on bonuses. But there is alarm about the potential consequences. One Tory City figure warned that Mr Cameron could be creating problems for an incoming Conservative government, not least by offering tacit support for potential over-regulation…’

This is all bollocks and should (and will be) ignored by David Cameron and George Osborne.

There is no question that the new policies are ‘banker bashing’ or trying to outflank Gordon Brown on bonuses. Brown has already painted himself into a corner as a serial ditherer on how to handle the bonus issue.

The complaint of over-regulation is the perennial whinge of the City fat cat and should be treated with the contempt it deserves. It will get louder and louder for a while, but it must be ignored resolutely. Eventually it will die out as these dinosaurs who don’t realize that a whole new regime of financial regulation will be needed in the future under a new Tory Government, will, if ignored, become extinct as a result of their failure to adapt to changing circumstances.

That goes for Pizza slingers as well!