Steve Richards: We are in a new era, but bankers haven't noticed

At no point did Hester consider that he already had enough money and so would forgo his bonus

Share
Related Topics

Imagine the thoughts that whirled around the mind of Stephen Hester in recent days. At first, as the bonus season moved into view, I suspect that very few did. He seems a man untroubled by doubt, at ease with himself and his vocation. Perhaps the odd reflection came: "There will be a bit of bother with the bonuses. Always is. It will pass."

When the bother came, maybe he suffered the occasional whirling thought. "These damned politicians are trying to interfere. My peer group will be getting a bonus. I should, too... and as for the media, they don't understand." It was not until Sunday when Hester was faced with both humiliation and a practical obstacle in the form of a Commons vote against his bonus that his thoughts turned towards action.

Note that we can only imagine what Hester thought. The banker earns incomparably more than any politician and has power that most politicians would die for. Yet he has not felt obliged to explain during the furore why he felt he deserved a bonus along with his multi-million pound deal. So far he has not appeared on the Today programme or written an article in an attempt to address the rising tide of anger. A minor politician in the midst of genuine or contrived outrage is forced to appear everywhere to put his or her case. In contrast, these powerful, rich, non-elected figures still operate in the dark, taken aback by scrutiny from beyond their own pampered, equally sheltered peer group. This must change.

In spite of Hester's convenient anonymity, we can with certainty make an assessment of what did not form part of his internal reflections. At no point, even when facing the heat of national vilification, did Hester consider that perhaps he already possessed more money than he needs and that therefore he would forgo his bonus, a tiny amount of his package, and become a minor hero. Instead, he wanted more and was willing to put up with national opprobrium to get it. Nor did he step outside his closeted world, where he mixes with others earning millions, to consider how this hunger for even more money looks from the outside. If he had, he would have given up the bonus when the row erupted, or before.

In spite of his silence, or perhaps because of it, we can draw an important lesson. Contrary to current political fashion, exhortation and cultural pressures are not enough to bring about change. Greed and distorted market values trump the fear of vilification every time. As a result, the relationship between politics and markets is bound to become more complex rather than less now that Hester has relented. Exhortation is the simplest solution, allowing politicians and their voters to remain at arm's length, but it does not work.

And yet political leaders cannot turn away now that the public mood is set. Ed Miliband reflected, and to some extent anticipated, the new moral awareness in his conference speech last September. David Cameron also knew over the past week he could not be on the wrong side of the mood, even if ideologically opposed to interfering in the activities of a bank. Cameron's awkward touch does not arise because he has become politically clumsy. The issue is genuinely awkward. There is a global market in banking that is out of control. Hester's rivals are getting big bonuses. Unilateral action against a single banker solves little.

The situation is not neat, but a mess. All political leaders, here and abroad, are feeling their way to a new era after the previous one closed with the collapse of Lehman Brothers in 2008. In the meantime, we are in a state of flux. Symptoms of transitional change are everywhere. They include the election of a coalition here in 2010, President Sarkozy's announcement of a financial transaction tax in France as his socialist rival establishes a commanding lead in the presidential contest, the failure of the Republicans to hit upon a convincing candidate and the disappointment of the Obama presidency. The bonus row is another indication. Not so long ago Labour ministers yearned to be associated with top bankers. Now a Tory Prime Minister feels the need to show distance. Cameron and others are navigating uncertainly as we move through the period from before the Lehmans collapse to whatever comes next.

For Britain, the sequence has a familiar air. In the 1970s, Edward Heath's government knew it had to deal with the unions, but did not know how to and was partly terrified of what would happen when it tried. The same fearful calculations paralysed the Labour government that followed. In relation to the banks, Gordon Brown did not want to appear prescriptive when he took over RBS and nor does Cameron now. Yet Brown knew, and Cameron senses, that nothing will be quite the same again. Miliband has a clearer ideological grip, as Thatcher had in the late 1970s.

The saga of the Hester bonus is not the end of the tumultuous phase that began in the autumn of 2008. Instead, his climbdown marks the first historic sign of weakness from those with a suddenly outdated sense of what they are worth.

s.richards@independent.co.uk / twitter.com/steverichards14

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

CRM Developer (MS Dynamics 2011/2013, JavaScript)

£55000 - £65000 per annum + Benefits + Bonus: Harrington Starr: CRM MS Dynamic...

IT Teacher

£22000 - £33000 per annum: Randstad Education Leeds: ICT TeacherLeedsRandstad ...

Graduate C#.NET Developer (TDD, ASP.NET, SQL)

Negotiable: Harrington Starr: Graduate C#.NET Developer (TDD, ASP.NET, SQL) Su...

Junior SQL DBA (SQL Server 2012, T-SQL, SSIS) London - Finance

£30000 - £33000 per annum + Benefits + Bonus: Harrington Starr: Junior SQL DBA...

Day In a Page

Read Next
 

Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Ellen E Jones
Scientists have discovered the perfect cheese for pizzas (it's mozzarella)  

Life of pie: Hard cheese for academics

Simmy Richman
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor
She's dark, sarcastic, and bashes life in Nowheresville ... so how did Kacey Musgraves become country music's hottest new star?

Kacey Musgraves: Nashville's hottest new star

The singer has two Grammys for her first album under her belt and her celebrity fans include Willie Nelson, Ryan Adams and Katy Perry
American soldier-poet Brian Turner reveals the enduring turmoil that inspired his memoir

Soldier-poet Brian Turner on his new memoir

James Kidd meets the prize-winning writer, whose new memoir takes him back to the bloody battles he fought in Iraq
Aston Villa vs Hull match preview: Villa were not surprised that Ron Vlaar was a World Cup star

Villa were not surprised that Vlaar was a World Cup star

Andi Weimann reveals just how good his Dutch teammate really is
Bill Granger recipes: Our chef ekes out his holiday in Italy with divine, simple salads

Bill Granger's simple Italian salads

Our chef presents his own version of Italian dishes, taking in the flavours and produce that inspired him while he was in the country
The Last Word: Tumbleweed through deserted stands and suites at Wembley

The Last Word: Tumbleweed through deserted stands and suites at Wembley

If supporters begin to close bank accounts, switch broadband suppliers or shun satellite sales, their voices will be heard. It’s time for revolution