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

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. /

React Now

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

Recruitment Genius: Parts Advisor

£16500 - £18500 per annum: Recruitment Genius: One of the leading Mercedes-Ben...

Recruitment Genius: Software Developer

£27500 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Telemarketers / Sales - Home Based - OTE £23,500

£19500 - £23500 per annum: Recruitment Genius: Experienced B2B Telemarketer wa...

Recruitment Genius: Showroom Assistant

Negotiable: Recruitment Genius: This global company are looking for two Showro...

Day In a Page

Read Next
A teenage girl uses her smartphone in bed.  

Remove smartphones from the hands of under-18s and maybe they will grow up to be less dumb

Janet Street-Porter
Rohingya migrants in a boat adrift in the Andaman Sea last week  

Burma will regret shutting its eyes to the fate of the Rohingya boat people

Peter Popham
Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor