James Moore: Barclays must take more heed of the taxpayers on the Clapham omnibus

Outlook: The Sex Pistols' lyrics could scarcely be more relevant today, and not just on these shores

Barclays' corporate symbol is the blue eagle. Right now the bank looks more like a rabbit, blinking in the headlights. Its American chief executive, Bob Diamond, is sick and tired of the media giving him a hard time about his pay and has taken the decision to show it the two-fingered salute of his adopted country.

The trouble is, this is one instance where the media's criticism is reflective of the public mood. In fact, were Mr Diamond to spend a day in disguise, listening to the conversations on the Clapham omnibus, he would likely come to the conclusion that he has got off quite lightly when it comes to the press.

Which is the least of his problems now, because the bank's investors have joined the party – and they cannot so easily be ignored.

With its annual meeting looming, Barclays could yet become one of the biggest and grandest victims of a "no" vote on a remuneration report.

It is in an attempt to counter this that the bank's silky smooth chairman, Marcus Agius, has embarked on what amounts to a public relations blitz with investors.

There won't be much eating done at the luncheons he will be sitting down to at the bank's headquarters. Hard talking is the dish of the day, and Mr Agius will say that a big helping of the millions Mr Diamond was paid this year is a holdover from his time as the boss of the investment bank Barclays Capital. Meanwhile that huge "tax equalisation" payment the dual US/British national received? A one-off. He will also listen to their criticisms and then nod his head, and say "we get it" in so many words.

The trouble is, what has become quite clear is that Barclays and its peers don't get it. At all. Investors are finally beginning to realise that. And they are finally beginning to ask why shareholders – who take much of Barclays' risk – don't see that reflected in their cut of its returns.

Based on that, it will take quite some gymnastics of the verbal kind on Mr Agius' part to explain why Mr Diamond's enormous bonus package was deserved in a year when, by his own admission, performance was poor.

Mr Agius is the consummate City performer, but even he might struggle to stave off a bloody nose after the votes are counted at the AGM.

As George Dallas, the corporate governance watchdog-in-chief at F&C Management, said yesterday, there is "a widespread and legitimate concern that high levels of bank remuneration have been enabled in a context of moral hazard, whereby sovereign governments serve as implicit guarantors of systemically important financial institutions".

In other words, if Barclays blows up, it is the taxpayers on that Clapham omnibus who will have to pay up.

In failing to take heed of this fact in setting their pay policies, banks like Barclays are damaging their reputations, their brands and their very businesses.

Mr Diamond, Mr Agius and their senior colleagues might like to reflect on that. There is a word that Americans like to throw about a lot: leadership. They need to show some.

 

35 years later, there's still no future for you

Goodness me, is that the chap who sells Country Life butter getting all worked up about the Queen on the TV? Yes it is, and John Lydon could (if he wanted) now make the odd TV appearance or two outside of the commercial breaks, thanks to the re-release of his band the Sex Pistols' "God Save the Queen" to coincide with the Diamond Jubilee.

It is, of course, a PR stunt that comes just weeks after Universal Music's acquisition of the band's back catalogue. All the same, his lyrics could scarcely be more relevant, and not just on these shores.

The next few weeks will induce nausea in even moderate republicans and the only way to escape the wall-to-wall coverage of the jubilee, and the sycophancy, and the toadying, is to book a holiday out of the country.

If that holiday is in Europe, they will see a similar, if not worse, situation in evidence because a huge army of jobless, disaffected youth stalks the Continent.

Economically, keeping these people inactive is an unconscionable and expensive waste of talent and production. Socially it may yet prove to be a ticking timebomb. No future and England's dreaming? There will be more evidence of that country's Neet (Not in Education, Employment or Training) nightmare this week. But it is not just England. The whole of Europe is dreaming. It needs to wake up. Fast.

 

More rotting fruit and ineffective firewalls

Neets are, of course, a long-term problem. Spain has more immediate woes to tackle, as it faces up to what could prove to be a financial tsunami, one that threatens to wreak economic devastation far beyond its borders.

The nightmare of an effective Spanish default is beginning to look like a reality as the country's bond yields push past 6 per cent and its borrowing costs come dangerously close to the territory marked "unsustainable".

The Spanish have been making efforts to deal with their unenviable situation. Cuts have been promised, salaries reduced and so on. However, the banking sector is still desperately weak and the remedial action taken has done little to ease the angst of its doubters.

A bailout, of some description, appears to be all but inevitable. As for that European debt firewall? It is looking about as solid as Apple's allegedly virus-proof computers were until a certain trojan reared its ugly head.

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