Domestic work is worthwhile stuff – whoever does it. And it’s not so hard to avoid being exploitative or disrespectful
The recent story about the royal household advertising cleaning jobs at less than the national living wage adds a pungent top layer of Downton to the uncomfortable politics of household work. It’s easy to be disapproving about the Windsors’ embarrassingly miserly employment practices: while it’s nice to see them economising, paying only £6.67 per hour, well under the recommended London living wage of £8.55, it seems likely that there are better targets for savings than those who wipe down the surfaces after the festival of Tupperware that is the royal breakfast. Hell, I pay my cleaner nearly 30% more than Liz ‘n’ Phil pay theirs and I’m some way behind them on the Sunday Times Rich List.
But beyond a few basic principles – pay decently, be respectful, wipe down the toilets before they get there – many people find it difficult to negotiate the relationship between cleaner and cleaned-for, whichever of those roles they’re undertaking. When you hire someone to clean your home, you are making a couple of value-laden personal declarations: my time is too valuable to spend vacuuming the skirting boards; and, yet, despite my disposable income, I’m a sorry excuse for an adult and I need someone else to clean up my mess.
Whenever I mention my cleaner in conversation, I rush to exculpate myself by pointing out that I’m a single parent who works full-time. My discomfort is both shapeless and bottomless. My great-grandmother kept an immaculate home while looking after 12 children; both my grandmothers left their south Wales villages at 19 to go into domestic service in London, dodging the shadowy menace of the “white slave trade” and the priapic sons of their employers. I’m not sure whether they would think that my unfamiliarity with the business end of a Dyson represented progress, or whether they simply wouldn’t recognise me as a member of the family at all. I guiltily imagine them, in their fiercely overheated corner of Methodist heaven, shocked into uncharacteristic silence by my incompetence.
Women, in particular, are trained to see their domestic environment as a reflection of their personal qualities. Only the strong and the stubborn feel no shame if a friend drops round unexpectedly when the house is a mess; more often, a peculiarly female ritual will play out, in which the hostess will make a joke about her sluttishness and the visitor will protest that everything looks lovely, while ignoring the strong smell of onions. The modern ideal of a clean, well-ordered home is one in which all the intimate manifestations of day-to-day life have been ushered away, to be replaced by a domestic facsimile: the spotless tea-towel, the sparkling floor. And this kind of set-dressing requires punishing inputs of time and effort that few can spare.
Those of us who are too lamentably weakminded to reject society’s expectations at least need to extricate ourselves from the guilt. After all, nobody frets about paying someone to change their car brake light or paint the stairwell. Domestic work, in all its small, comfortable glories, is worthwhile stuff – whoever does it. And it’s not so hard to avoid being exploitative or disrespectful. I remember being grimly fascinated by a cleaner’s account of being asked to handwash her employer’s lingerie: I suspect we can all agree that if someone’s scrubbing your knickers, it has to be either because you’re paying them an hourly rate that would make Bob Diamond blush, or because they really, really want to.
Pay a decent hourly rate; ask after their children; offer them a cup of tea. If you’re feeling punctilious, check with HMRC whether you should be offering holiday pay or paying national insurance. As any adult couple will tell you, the division of domestic labour can be fraught with personal politics, but so long as cleaners feel they’re being paid honest rates for valued work, there’s no rational reason for anyone to agonise over the decision to employ one.
• This article was amended on 14 November 2012. In the original it was stated the royal household’s cleaners were paid “only £6.45 per hour, well under the recommended London living wage of £7.85″. In fact the wage offered as advertised on the Buckingham Palace website is £6.67 per hour, and the London living wage is now £8.55 per hour.
Antony Jenkins has plenty to be getting on with since replacing Bob Diamond as he attempts to repair the bank’s reputation
Barclays’ warning that a US regulator is accusing it of attempting to manipulate electricity prices is just the latest item on the lengthy to-do list for new chief executive Antony Jenkins.
Jenkins, who is fond of talking about turning Barclays into the “go to” bank, shed little fresh light on the so-called “transform” programme he is masterminding to repair the battered reputation of the bank.
The former head of the retail bank, Jenkins repeated the goals that lie behind the transform programme, which also spell out the motto “transform”: t(urnaround), r(eturn) a(cceptable) n(umbers) and s(ustain) for(ward) m(omentum).
Delivering his first set of results since replacing Diamond, who quit following the Libor rigging scandal, Jenkins acknowledged Barclays had “much to do to restore trust among stakeholders”.
Unlike the situation with Libor, where Barclays admitted errors that led to a record £290m fine, he was adamant the bank would fight any fine slapped on it by the US Federal Energy Regulation Commission.
He has given himself until February to complete the transform programme which also includes the ethics review – codenamed Project Mango – being undertaken by Rich Ricci, the remaining head of the investment bank.
Jenkins, though, repeated that the transform programme will project his vision for the future of the bank. It also has lawyer Anthony Salz conducting a group-wide review of the bank’s culture.
The new chief executive is promising to assess businesses not only on the profits they make but also on the impact they have on the bank’s reputation. Businesses involved in tax planning, for instance, are expected to be shut down.
On Wednesday, he attempted to demonstrate that the bank is taking the axe to bonuses – a source of friction in the relationship with shareholders and the public. A year ago, Barclays put aside 46% of investment banking revenue to pay bonuses. So far this year this has fallen to 39%.
“We don’t intend to stop there [and will] drive that ratio down over time,” Jenkins said. Even so, the bank concedes it intends to remain competitive and be in the “top quartile” when it comes to payouts.
He has already scaled back the targets set by Diamond for return on equity – a measure closely watched by shareholders – from 13% to around 11.5%.
Barclays ‘being very coy’ about identifying staff involved in fixing scandal, says Mr Justice Flaux
Former Barclays chief executive Bob Diamond and other bosses there could be hauled before the high court to explain what they knew about the Libor interest rate fixing scandal.
A high court judge has ruled that a landmark trial into Barclays’ role in rigging the London interbank lending rate (Libor) must go ahead, with the bank’s bosses, including Diamond, called into the witness box.
“There is obviously a question as to what Mr Diamond knew [about Libor-rigging] and when he knew it,” Mr Justice Flaux said during a preliminary hearing into the case at the high court.
Guardian Care Homes (GCH) is suing Barclays for up to £37m over the alleged mis-selling of interest rate hedging products (swaps). The residential care homes operator says it should be fully compensated as the swaps were based on Libor rates that had been fiddled by banks.
Barclays has agreed to pay £290m of fines to US and British authorities over its role in the manipulation of Libor and other key interest rates.
The judge said Barclays was “being very coy” about identifying which of its staff were involved in the Libor fixing scandal, adding that the court would draw its own inference “unless and until they go into the witness box”.
In an extraordinary attack on Barclays bosses, Flaux told Adrian Beltrami QC, for the bank: “Your client knows who it is who is responsible for all this – they must do.” He went on to accuse Barclays of trying to use complex legal arguments to “shut out” the case.
“This is all shadow-boxing. Your client knows jolly well what this is being alleged,” Flaux said. “The real issue is that they are trying to shut it out at this stage because they don’t like it. What they’re trying to do is shut it out altogether.” Beltrami had argued that the swap contract Barclays sold in the case did not mention how the Libor rate was set, so the claim should not be allowed.
Tim Lord QC, representing GCH, said Libor products should come with a health warning similar to cigarettes: “Entering into these Libor swaps will seriously damage your financial health.”
Flaux ruled that the GCH case should go to trial at the end of October.
Barclays had argued that GCH’s advisers included Rothschild bankers and prominent law firms with financial expertise, so it should have understood the products it was buying and their terms. “[GCH] is a significant business that owes Barclays £70m. We do not believe any aspect of the case has merit and are defending it,” a Barclays spokesman said.
Gary Hartland, GCH chief executive, said: “Today is a huge milestone with a trial now going forward. Our claim is not just based on mis-selling but on the effect of senior management at Barclays instructing the aggressive selling of [financial products] while attempting to rig Libor.” John Walker, chairman of the Federation of Small Businesses, said: “This legal battle will be watched carefully by the thousands of small businesses affected by mis-selling who may decide to take a similar route.”
Lord said the case is “likely to be the tip of the iceberg”, leading to other claims against banks over the Libor scandal.
The Financial Services Authority estimates 44,000 interest rate swaps – a form of insurance to protect companies from interest rate changes – have been mis-sold to UK companies since 2001.
The test case is also likely to lead to the disclosure of hundreds of thousands of internal emails related to the Libor scandal. The court heard that lawyers for GCH had requested the disclosure of more than 1.3m documents from Barclays. The bank’s lawyers said GCH had requested “indiscriminate disclosure” and Barclays wanted to limit the number of documents it would be forced to hand over.
The ruling came as French prosecutors announced that they had opened a preliminary investigation into whether banks in France were also involved. UK and US authorities have already begun detailed probes into the Libor affair.
Jezri Mohideen, head of rates trading, was suspended as the bank awaits a fine for its role in the rate-fixing scandal
Royal Bank of Scotland has suspended one of its most senior traders in London in the latest development in the Libor fixing scandal for which the bailed-out bank is bracing for a hefty fine.
Jezri Mohideen was suspended last week, according to Bloomberg news agency, as head of rates trading for Europe and Asia Pacific. He had previously been based in Tokyo, where he was head of yen products, and Bloomberg reported he had allegedly instructed colleagues to lower Libor rates while in this position.
RBS has fired four traders for attempting to manipulate Libor and other interest rates. They include Tan Chi Min, a senior trader in Singapore who is now suing the bank for wrongful dismissal. The case involving Tan has given rise to embarrassing allegations with the release of instant messages in which an RBS trader quips “hahahah” and describes Libor as a “cartel”.
The bank would not comment on Mohideen, whose suspension comes as the bank awaits a fine from a number of regulatory bodies, including the Financial Services Authority, for its role in the Libor scandal, which has already led to the departure of Barclays chief executive Bob Diamond.
RBS, 81% owned by the taxpayer, has also taken disciplinary action against a number of individuals involved in attempting to rig Libor while others have left of their own accord.
A bank spokesman said: “Our investigations into submissions, communications and procedures relating to the setting of Libor and other interest rates are ongoing. RBS and its employees continue to cooperate fully with regulators”.
Bloomberg had spoken to Mohideen last month, when he told the news agency he had not pressurised colleagues into lowering the submissions to the Libor panel.
The latest allegations in the Libor affair came as RBS shares fell 1% to 268p amid warnings from analysts that the bank would need to cut the price of the 316 branches it was going to sell to Santander for £1.6bn.
The sale, forced on RBS by Brussels as a result of the £45bn taxpayer bailout, fell through on Friday after more than two years of negotiations and after £4.5bn was pumped into Santander UK business by its Spanish parent.
Ian Gordon, banks analyst at Investec, said: “Assuming that an alternative sale is agreed, we now anticipate that RBS may ultimately settle for terms £0.5bn to £1.0bn worse than those agreed with Santander in August 2010.”
The bank said it will “commence a new process of disposal” and its chief executive, Stephen Hester, is understood to have received at least three phone calls from potentially interested parties over the weekend.
Virgin Money, which took over Northern Rock at the start of the year, and venture capitalist JC Flowers are among those interested. But NBNK, the stock market-listed company created to bid for a bank, seems unlikely to enter the fray after its chief executive, Gary Hoffman, quit to join insurance company Hastings. Hoffman had joined NBNK from Northern Rock but failed to buy 632 branches being sold by Lloyds Banking Group.
RBS is stressing that 98% of the work required to separate the branches has been done despite the delay to the sell-off, which must be completed in the next 15 months under the current timetable, which led to some speculation that the branches could be floated off.
Analysts at Credit Suisse said that if RBS did not complete all the agreed divestment by the end of 2013, “the UK government will appoint a trustee which will dispose of the businesses ‘at no minimum price'”.
Last week RBS floated 30% of its insurance arm, Direct Line – a sale also imposed on the bank by Brussels.
I’ve changed my mind. I don’t want those at the bottom vilified and there’s no point doing the same to Peter Cummings
The news that Peter Cummings, an HBOS banker, has been banned for life from working in financial services and fined £500,000 for his role in the banking crisis forces us to ask the question: should we blame people or the system?
As someone who coined the term “feral elite” in response to the phone-hacking scandal which had followed hot on the heels of the MPs’ expenses and banking scandals, I’m going through a change of heart.
My rethink is the fault of David Cameron, who made a speech in June in which he effectively signalled the end of the welfare state as we know it by castigating the poor for their poverty. It was their fault they had failed, and the system should re-engineered to punish such failure. This personalisation of responsibility leads straight to the archetype of the sofa-lying benefits scrounger, and the question: “Why should we work to pay for them to do nothing?” Why indeed?
This logic of conditionality leads inevitably to the poor law, the workhouse and even the starvation of the “idle”. After all, it’s their own fault! And thus the whole welfare system becomes distorted by believing the worst of people rather than the best.
A better question is: “If people are living their lives on meagre benefits, for which they have to qualify by undertaking ritual humiliation at the hands of the state, why? Why don’t they want to make the most of their life in more creative and rewarding ways?”
The answer will be complex: that there are no jobs, or that those that do exist are degrading, mind-numbingly dull and appallingly paid; that those on benefits left school unable to read or write properly; that drugs, alcohol or physical abuse has wrecked their life; that they have mental or physical barriers to overcome; that they have people to care for; or simply that grinding poverty has taken its toll. I don’t want to target, blame and vilify these people, I want to give them chance after chance to beat the odds stacked against them and make the best of themselves.
So here is my mini-epiphany. If I don’t want those at the bottom vilified and targeted then how could I personalise and target those at the top? A feral elite is of course just the flipside of a feral underclass, conjuring an image of rampant and uncontrollable forces; a threat and a danger that galvanises us into action, an enemy to be overcome. These have been the dominant narratives of left and right for aeons. The need for an enemy; bourgeoisie or proletariat, fat cat or scrounger.
This tit for tat isn’t working. The gap between the rich and poor grows as the language of blame is ratcheted up. In part that’s because the right have more resources to vilify their enemy, the poor, than the left have to vilify theirs, the rich. And while abuse of the system at the top is easier to attack – and cheating benefits to put food on the family table is not the moral equivalent of rigging the Libor system to put another BMW in the drive – they are both on the same spectrum of the personalisation of morality.
The bankers may be in our sights but a narrative that says it’s all the fault of Cummings or Bob Diamond just isn’t good enough. The issue is not how much the rich or poor should be punished for their individual moral failings but why does the system create such behaviour in the first place?
Of course we all bear moral responsibility for ourselves – we make choices – but it is the context in which decisions are made that matters most. Yes, the personal is political. But the balance of our blame must switch from who is wrong to what is wrong and with it our reforming energy switched from punishing individuals to changing systems.
So the challenge is how to foster systems in which a collective morality creates the conditions that bring out the best in people. What forms of economic, community and family structure are more likely to develop a sense of joint and mutual citizenship of society and stewardship of the planet? What helps us to empathise, respect, co-operate and show compassion? The alternative old left view, found in Marx, is that there is only vested interest – that there is no room for sentiment or morality, just the scientific logic of class war from which there is no escape.
Somewhere between the poles of individual responsibility and class interest we must discover a language and a way of being that holds out the hope of a good life and a good society. Such that when we look into the eyes of others we see not an enemy, not some “other” but ourselves. Only from that basis can we observe the golden rule of life – to treat others as we would have them treat us.
Our enemy is not other people but the processes, institutions and belief systems of modern consumer capitalism. Vilifying those at the top for their moral failings just creates the space for stronger forces to punish those at the bottom.
Incoming Barclays chairman, author of 2009 banking report, calls for firms to publish numbers of staff earning more than £1m
Sir David Walker, the incoming chairman of Barclays, has reignited the debate over disclosure of top pay by calling for banks and other major companies to publish numbers on all staff earning more than £1m.
At the first hearing of the new parliamentary commission on banking standards, Walker also said that bonuses should not be linked to sales targets as he admitted that standards in the banking industry “had slipped in a grave way”.
Walker was appearing before MPs and peers on the new commission, chaired by the Conservative MP Andrew Tyrie, for his 2009 review of corporate governance in banks for Labour rather than in his capacity as chairman of Barclays, a role he begins at the start of November once Marcus Agius departs following the Libor-rigging scandal.
In 2009, Walker called for pay above £1m to be disclosed in bands, without individuals being identified – though he backed down when the coalition came to power. But he told the committee that consideration should now be given to requiring bands of the top “50 to 100″ highest paid bankers to be released, in what appeared to be a return to his 2009 recommendation.
“It is very hard for one firm to do that isolation,” he said, calling for a “public policy response”. “My recommendation would be hard to confine to banks.”
With major companies arguing they need to pay staff to compete internationally, he said that “being secretive” would not help win the argument.
But he made clear that he was not opposed to high pay and that the EU’s attempt to cap total pay would only lead to higher salaries. “The inappropriate incentivisation is accountable for a lot of what has gone wrong. The problem that has been most serious is not so much levels of remuneration but the gearing of remuneration to revenue,” said Walker.
“The preoccupation with short-term revenues in the investment banks has been hugely damaging.” Instead of adopting the Walker proposals, the coalition required the top five highest paid executives outside the boardroom to be published, anonymously. In the first year of new rule, for the 2010 financial year, Barclays disclosures showed that five of its top bankers had been handed £110m. The five included Rich Ricci, the current head of the investment bank, and Jerry del Missier, who left following the Libor scandal. They both earned more than chief executive Bob Diamond, who has now left following the £290m fine for Libor rigging.
Disclosure of the top eight outside the boardroom is now required, though the individuals do not need to be identified.
Following the “shareholder spring” and the recent consultation by business secretary Vince Cable on boardroom pay, Walker added: “All FTSE 100 remuneration committees are on notice they are under the spotlight.”
Walker has previously raised concerns about free in-credit banking for current account customers – believing that it could encourage misselling of more profitable products – and admitted on Wednesday that no bank would want to be the first mover in introducing changes. He put the emphasis on a body such as the Office of Fair Trading to investigate the matter.
He said that the industry needed to “get away from remuneration tied to revenue performance or sales” following misselling scandals such as payment protection insurance for which the major banks are facing a bill of more than £8bn.
But, a former regulator and banker, also made clear that he did not think that harking back to the past was the right thing to do, citing “clear malpractice” in the early 1980s before new rules were introduced. As well as the focus on commissions, he regarded the new emphasis on quarterly reporting by major companies as detrimental.
He said that during the “go-go” years chasing market share through sales targets was easy to achieve. “All you have to do is forget to price risk into the charges you apply,” said Walker. He said that speed was also regarded as more important “rather than old fashioned concerns about integrity”.
A career banker who started at Barclays almost 30 years ago
Antony Jenkins, the new chief executive of Barclays, is a career banker, having started as a graduate recruit at the bank’s South Kensington branch almost 30 years ago. Unlike his predecessor Bob Diamond, however, Jenkins comes from the “safer” retail side of the industry rather than buccaneering investment banking that has caused Barclays so much trouble. He is the very antithesis of the brash American – a mild-mannered Brit who says he listens to rock to get pumped up for big meetings, but switches to jazz or classical music when he needs to think through a difficult problem.
“From big-hitter Bob to safe-pair-of-hands Jenkins,” said Louise Cooper, markets analyst at BGC Partners. “He is both a retail banker through and through and a Barclays man,” and his appointment “may even suggest that boring retail banking has become sexy again in the difficult investment and trading environment,” she added.
While Jenkins’ main expertise is in retail banking and he is seen as the best internal choice for the CEO job, Barclays’ chairman-elect, Sir David Walker, a 72-year-old City veteran, comes from outside and has spent much of his career in investment banking. The two will work closely together.
The 51-year-old marathon runner has been described as the “nice guy” of banking by former Citigroup colleagues, and as a family man. He is married with two children.
Jenkins, who comes from Stoke-on-Trent, had until now been in charge of Barclays’ global retail and business banking, including its retail business in Africa, and is credited with streamlining the division.
Jason Napier, banking analyst at Deutsche Bank, said: “He is well known to the market, businesses under his care have performed well, he possesses experience within and without the group, and his reputation and retail heritage provide a base for rebuilding the bank’s reputation over time.”
Jenkins has a masters in PPE from Oxford and an MBA from the Cranfield Institute of Technology, and started his career in 1983 when he completed the Barclays management development programme. He went on to hold various roles in retail and corporate banking. He moved to Citigroup in 1989, working for the American bank in London and New York.
He was lured back to Barclays by its former chief executive John Varley, who promised Jenkins a seat on the executive committee in late 2005 if he moved his young family from New York back to London. However, that promise was broken – another ex-Citigroup banker, Frits Seegers, became head of the retail and commercial bank with a seat on the four-strong executive board instead. Jenkins still joined the bank as head of Barclaycard and in 2009 his gamble paid off when he emerged as the big winner of a management shakeup and became Seegers’ successor.
“The first job on Mr Jenkins’ to-do list must be to get a grip on the investment banking business that is still one of the biggest in the world and a significant profit generator for the bank,” said Cooper.
“The loss of Bob Diamond was a big blow to this division so the key profit generating staff need to feel confident in the new CEO… Personally, Mr Jenkins needs to be able to handle media scrutiny and parliamentary questioning. He will need to get a grip on the current investigations and massive regulatory changes facing the banking industry. He must also get used to having a much greater profile – he is relatively unknown – anonymity has now gone.”
The influence that Bank of England governor Sir Mervyn King had in forcing out Bob Diamond as chief executive of Barclays illustrates the need for tougher oversight of the central bank, a powerful committee of MPs concludes in a report on the Libor-rigging scandal.
The 122 page report by the Treasury select committeedescribes the culture of Barclays as having “gone badly awry” but said the governor’s involvement was “difficult to justify” given that he does not yet have responsibility for regulating banks.
King, who appeared before MPs last month, made clear that he did not demand Diamond’s resignation following the £290m fine on Barclays for attempting to manipulate interest rates. However, he summoned the bank’s chairman, Marcus Agius, and his deputy Sir Michael Rake to tell them that regulators had lost confidence in Diamond in the wake of Libor-fixing fine.
King spoke to the two Barclays boardroom directors on the day that Agius had announced his resignation. Agius had resigned after a conversation with Lord Turner, chairman of the Financial Services Authority, who had left their talks believing that it was Diamond who would quit, not Agius. Turner’s inability to get his message across is also criticised.
“Whatever the merits of the action taken by the governor of the Bank of England and chairman of the FSA – and this committee has sympathy with the conclusion that they had drawn about the leadership of Barclays – the action they took has exposed implicit, and potentially arbitrary power, to force out senior figures in the financial services industry,” the report said.
“The return of the ‘governor’s eyebrows’ – which many will welcome on this occasion – comes with the need for corporate governance safeguards,” the report said.
Andrew Tyrie, the Conservative MP who chairs the Treasury select committee, said the report “has called for action in a number of areas, including higher fines for firms that fail to co-operate with regulators, the need to examine gaps in the criminal law, and a much stronger governance framework at the Bank of England”. The Bank of England pointed out that the Financial Services bill was setting out new governance structures for the central bank.
The report criticised the Barclays board for presiding over “a deeply flawed culture” that allowed attempts to manipulate Libor to begin in 2005. The bank stressed that it had now announced a review of business practices. “While we don’t expect to agree with every finding in [the report], we recognise that change is required, not least to restore stakeholder trust,” a Barclays spokesman said.
The report is also critical of the FSA’s slow approach to investigating Libor, which was two years behind the US. Andrew Bailey, the top regulator at the FSA, attended the Barclays board meeting in February to outline concerns and Turner had followed this up with a letter in April to the bank’s chairman.
“It will be a great step forward if the regulators get away from box-ticking and endless data collection and instead devote more careful thought to where risk really lies. This could reduce the regulatory burden and, at the same time, provide more effective oversight. It will involve a change in culture on the part of the regulators and is a major challenge for the future,” Tyrie said.
This was welcomed by the FSA, which is being disbanded next year when banking regulation will be handed to the Bank of England. “We welcome the committee’s report and their view that the new judgement led approach to regulation being delivered by the FSA is the right one,” an FSA spokesman said.
The report indicated that a new area for consideration by the new cross-party parliamentary commission on banking standards, which is being chaired by Tyrie, is the leadership style of chief executives.
“The parliamentary commission on banking standards’ examination of the corporate governance of systemically important financial institutions should consider how to mitigate the risk that the leadership style of a chief executive may permit a lack of effective challenge or to the firm committing strategic mistakes,” the report said.
For the first time, the report produced evidence by John Varley, the chief executive of Barclays during the Libor rigging scandal. Varley left in January 2011 when Diamond, who had been head of investment banking, replaced him. One focus of the inquiry was a file note that Diamond wrote to Varley, copied to Jerry del Missier, a close colleague. The note outlined a conversation with Paul Tucker of the Bank of England during the October 2008 crisis, which Del Missier interpreted as an instruction to cut the bank’s Libor submissions. Del Missier quit the bank on the same day as Diamond.
Varley told the MPs in written evidence that he rang Lord Myners, the former City minister, Sir John Gieve, then a deputy governor of the Bank of England, and Hector Sants, then chief executive of the FSA, after reading Diamond’s note. He had emailed Diamond to say “we should discuss” this, but did not recall any further correspondence.
The MPs concluded that Barclays “did not need a nod, a wink or any signal from the Bank of England to lower artificially their Libor submissions” as it was already doing so, even before the October 2008 crisis.
Septuagenarian charged with rebuilding Barclays’ reputation after the Libor scandal says priority is finding a new chief executive
Sir David Walker, the septuagenarian charged with rebuilding Barclays’ reputation in the wake of the Libor scandal, says finding a new chief executive is his number one priority, though a rewrite of the bank’s pay policy is also on the cards.
“This is a good time to be reforming pay,” Walker told the Observer last week.
“We may still suffer some breakages [employees leaving] but if people are only doing it for the money they are probably not the people we need.”
At the bank’s annual meeting in April, nearly a third of investors failed to back the remuneration report, which included a £17m pay package for then chief executive Bob Diamond, and the cost of a £5.7m tax bill for the US-born banker, who quit after the £290m Libor fine.
Walker, who has 50 years’ experience as policymaker and banker, led a review of banking culture for the Labour government in the aftermath of the 2008 banking crisis. He plays down the need for an overhaul: “The board absolutely does not need a clearout, but it does need to supplemented. Three significant roles have gone – the chairman, the chief executive and the chairman of the remuneration committee.”
Walker is expected to stay for three years – by which time he will be 75. He says his age will not hinder him: “I’m up for it.”
Non-executive director who clashed with the chairman over Bob Diamond’s bonus suddenly quits
Barclays was mired in fresh controversy on Wednesday night after handing almost £9m to a top banker who left following the Libor scandal and after one of its highest profile non-executive directors suddenly quit, taking the toll at the top to four.
Jerry del Missier, who resigned after telling subordinates to reduce the bank’s Libor submission during the October 2008 banking crisis, was reported to have been handed £8.75m cash as part of his leaving package.
Alison Carnwath, who also chairs the property company Land Securities, cited “personal reasons” and time pressure for her immediate resignation from the board of Barclays, which is still reeling from the exit of chief executive Bob Diamond.
The bank’s chairman Marcus Agius, who is also in the process of leaving but is due to present the bank’s half-year profits on Friday, will now face questions about the pay off for the Canadian-born banker Del Missier, who had just been promoted to chief operating officer.
Del Missier was a close lieutenant of Diamond’s and appeared before the Treasury select committee to explain why he had instructed the Libor submission to be lowered.
Del Missier said Diamond had told him to cut the rate after a conversation with Paul Tucker, the Bank of England deputy governor, something both Diamond and Tucker insist was not the case.
Del Missier was one of Barclays’ top paid bankers. Although he did not sit on the board, where his pay would need to be published, in 2010 it emerged he had been handed £40m when deals paid out.
When reports of a disagreement over Del Missier’s leaving bonus emerged, the bank had insisted it was keen to foster debate in the boardroom.
Shadow Treasury minister Chris Leslie called on del Missier to follow Diamond and waive the bulk of his payoff. “Having resigned from Barclays over the Libor fixing scandal, people will find the scale of this award completely inappropriate. Bob Diamond rightly waived most of his pay off and Mr del Missier ought to do the same,” Leslie said.
Barclays declined to comment.
There was speculation of boardroom tensions even before the Libor scandal broke, between Carnwath and Agius during negotiations over Diamond’s bonus in the spring.
Former investment banker Carnwath wanted Diamond to waive a £2.7m bonus – part of a £17m pay deal – to show leadership but she eventually agreed to the payout. At the bank’s annual meeting in April the payout sparked a shareholder revolt over the bank’s pay policies.
Carnwath herself also faced a shareholder rebellion, with 22.5% of investors failing tosupport her because of her status as chairman of the remuneration committee. However, when it later emerged that she had tried to stop the bonus, some investors made it clear they were keen for her to stay. One said: “She seemed to have been the one board member asking the right questions.”
However, others pointed out that she has eight other jobs or advisory roles in addition to Barclays. They include a non-executive directorship at the troubled hedge fund group Man Group, where she faced another shareholder revolt about her continued membership of the board. She has been on the board of Man for 11 years – which contravenes governance guidelines. Some 33% of investors failed to support her election to the board of Man. At Land Securities her election to the board was not so controversial.
Carnwath has not yet commented on the recent events at Barclays, but has spoken to accountancy magazine economiafor a cover interview which is to be published on Friday. In the interview she explains that the Barclays remuneration committee faced “a lot of pressures” when dealing with the top echelons of the bank. She adds: “It’s not easy, and we don’t always get it right.”
“I sometimes wake up worried – or don’t go to sleep at all because I’m anxious,” she said. “That’s not so good. Last night I lay awake fretting about something. I then have to stand up and somehow all the worry drains out of my feet, or I write things down.”
In a statement announcing her departure, Carnwath blamed the pressures of too many jobs.
“With regret I have concluded that I am no longer able to devote sufficient time to my role as a director of Barclays given my other commitments. I would like to thank my colleagues on the board for their support and I wish Barclays continuing success in the future.”
Agius, who will leave once his successor is found, thanked her for her contribution since joining the board in August 2010.
But her departure comes at a difficult period for the bank which is due to publish first-half profits of around £3.7bn on Friday.
The board has now handed a central role to former top accountant Sir Michael Rake, who becomes deputy chairman – although he has ruled himself out of the chairman’s job despite expressing interest when Agius first quit.
The ongoing turmoil at Barclays came as the US Treasury secretary Tim Geithner pinned the blame on the UK for the Libor problem. At the time he was head of the Federal Reserve Bank of New York and made proposals to the UK about how to solve problems with the rate, which is overseen by the lobby group the British Bankers’ Association.
“We felt, and I still believe this, that it was really going to be on them,” he said.