Financial speculation in commodity markets is a significant factor in rising food prices, and a contributor to the three price spikes in the last five years (Britain in nutritional recession as rising prices take toll on diet, 19 November). Proposals for regulations to curb speculation on food are on the table at the EU and could, if strong enough, prevent prices repeatedly spiralling far beyond the levels dictated by supply and demand.
So far, the UK government has failed to back tough rules on speculation. George Osborne and his fellow EU finance ministers are due to vote on the proposals in the coming weeks. If the chancellor is not yet convinced of the need to protect food from finance, perhaps the stark evidence of rising food poverty in the UK will do the job?
Food campaigner, World Development Movement
• Please would you stop using the term “austerity Britain” to descibe the current plight of the poorest people in our country. Austerity was what was experienced during the second world war, and afterwards, and still has the resonance of “we are all in it together”. Many foods and other commodities were simply not available. Many which were available were rationed for everybody. I do not wish to paint a false, rose-coloured picture of our society at that time; there was a black market for many goods, there were looters, people with money could sometimes obtain goods others could not afford. But overall both rich and poor were equally affected by the food shortages of the time and, for example, by the power shortages in the immediate aftermath of the war.
This is not even remotely the same thing as not being able to afford what is readily available in shops across the land. Not being able to buy adequate nutritious food is directly the fault of the policies of the present government in a time of (relative) peace. The PM and chancellor and their cronies will not be among those in this situation. It is time that Guardian journalists and others stopped using easy-come phrases which make it appear as if we are all in it together. We are not, and that makes the current government’s policies the more despicable.
• Pizzas, pies, burgers, chips, crisps, chocolate etc are not cheap, let alone ready meals. One can get one’s five a day for little money by buying things such as potatoes, cabbage, carrot, swede, onion, frozen peas and green beans, bananas and apples. For cheap protein one can buy cheap minced beef or a whole chicken, then pour off the fat. Frozen white fish, tinned pilchards, eggs, lentils and dried beans are other cheap sources of protein and vitamins. Rice, pasta and bread can help fill you up.
Lack of money is not the explanation for someone choosing a junk food diet.
Philosophy tutor, department of continuing education, University of Oxford
• While not denigrating the very real poverty facing some families in our appallingly divided society, I can’t help wondering whether better cookery classes at school, or in local community centres, showing how to make reasonably cheap, nutritious food quickly would help some struggling families. In Italy, for example, cucina povera, cooking for the poor, offers such food.
Big pots of soups and casseroles with little meat content can be made in advance and frozen. Slow cooking of cheaper cuts of meat may be a solution to getting protein. Shopping in markets and smaller independent local shops is not necessarily dearer than supermarkets and can in my experience in my town be cheaper.
• The salary I’ve been earning since graduating means that it’s impossible for me to afford fruit and vegetables. As a would-be healthy eater, this concerns me greatly. Surely the government should be increasing tax on junk food, thus providing money for subsidies on fruit, vegetables and other healthy foods. Healthy diets mean healthier people meaning less stress on the NHS.
Hove, East Sussex
The revelation that the British financial services industry is lobbying (City’s lobbying bill revealed, 10 July) should come as no surprise in a nation where lobbying operates as a necessary and integral part of the democratic process. The City and its regulatory framework are rightly subjected to key political decisions. So it is absolutely essential that the City’s voice should be heard.
The role of lobbying is to ensure that politicians are informed of all issues before making key policy decisions, and we all have a right to put forward our arguments to government. Therefore we must avoid making politicised judgments on who can and cannot lobby.
What the article does reveal is that the government’s proposals on a statutory register of lobbyists do not go far enough. Every organisation should have the freedom to lobby; but it should also be transparent in the process if we are to gain public trust in our political institutions. Only a universal register that covers all lobbyists – be they public affairs consultancies, powerful in-house lobbyists such as Fred Michel, or trade bodies such as ours – will provide the transparency the public deserves.
Chief executive, Public Relations Consultants Association
•?The revelations that the Financial Services Authority is influencing financial regulation in the interests of the City (City watchdog works with banking groups on lobbying, papers reveal, 11 July) are startling. But the FSA’s ability to influence policy in favour of the banks extends even further, as it has seconded staff into every UK and European institution involved in financial reform.
Last month, one FSA secondee to the European parliament wrote a proposed amendment to draft EU regulation to limit financial speculation on food prices. If passed, the amendment would drastically weaken measures to prevent speculation by banks from causing massive spikes in the cost of basic foods.
This is just one more instance of the so-called watchdog acting in the interests of the sector it is supposed to regulate, rather than in the public interest.
Director, World Development Movement
•?I was bemused to read your report on the City of London corporation and our alleged role as a lobbying organisation (From Wat Tyler to tax cuts: how the corporation keeps Square Mile safe for capital, 10 July). As the piece acknowledges, the City corporation openly promotes the international competitiveness of UK financial and professional services for the benefit of the nation as a whole. It is no secret, therefore, that in doing so elected City representatives – including myself – interact with government ministers and other politicians. But to imply that in communicating the City’s point of view or by hosting ceremonial events we have secured any policy changes against the public interest is absurd.
The statement that the City corporation has “43 media staff” and a “50-strong economic development unit sifting through international regulations” is similarly overblown. The actual number for media and public affairs staff is 12, while the corresponding figure for economic development and attracting inward investment is 14. All the other staff in both areas are dedicated to work such as supporting local communities across London or helping to look after the City’s residents and visitors.
The City corporation does not hide the fact that it makes the case for UK financial and professional services. But we are not wilfully blind cheerleaders: we have, for example, been strongly critical of parts of the banking industry over Libor manipulation.
Financial services remains an industry that is worth promoting internationally because it underpins jobs and growth across the UK. The City corporation does this promotion in a transparent manner free of party politics.
Policy chairman, City of London corporation
•?On a wall of a building in central Cambridge (which, until recently, housed a branch of Barclays bank) there is a blue plaque identifying it as the site of the home of John Mortlock, 1755-1816, and where he opened the first banking house in Cambridge. At the bottom of the plaque there is a quotation: “That which you call corruption I call influence.” Perhaps this is the foundation for the current banking scandals.
•?It is not just the fault of politicians that we now face a crisis of confidence in our democratic system (Letters, 11 July). We, the great British voting public, should accept part of the responsibility. How can we continue to tolerate the state of affairs reported in your paper last week: “One in six peers have paid links with financial services”; “Political parties get staff and services donated by ‘big four’” ; “City watchdog works with banking groups on lobbying, papers reveal”?
Why does the great British voting public still refuse to accept the need to fund our political parties from our own individual financial resources? Surely, it is in all citizens’ interests to free our political representatives from the pitfalls of having to rely on funding from wealthy special-interest groups. Unfettered democratic decision-making requires that every citizen of voting age, old or young, should be prepared to pay a political levy of one pound per person per year. This considerable, democratically raised sum would then be divided between the political parties according to the level of support that they receive through the ballot box. All other donations to political parties should be prohibited by law. By these means, any other donations will be seen for what they are, bribes. He who pays the piper calls the tune.
•?Tamasin Cave (We must fight back against these City lobbyists, 11 July) suggests we write to our MP to demand greater transparency around the City’s lobbying machine. I wonder how the outgoing head of the British Bankers’ Association, Angela Knight, would have received such representations when a Conservative MP.
Dr Alex May
• Association of British Insurers attacks bonus levels
• Annual bonuses for top executives down 48% on 2010
• Profits fall 3% to £5.9bn
• Bob Diamond’s bonus could be £900,000
• Return on equity down to 6.6% for 2011
• BarCap revenue and profits down
Barclays was on a collision course with its shareholders on Friday despite the bank’s insistence that it had cut the bonus pool for its investment bankers at Barclays Capital.
Robert Talbut, chairman of the investment committee at the Association of British Insurers (ABI) said: “Whilst overall bonus levels at Barclays have been reduced, for Barclays Capital, this reduction is only in line with the fall in profit before tax. This appears to be very close to business as usual. It is not the signal of the change required in order to improve the investment case.”
The ABI, whose members control a fifth of the UK’s stock market, had been urging Barclays to show restraint ahead of this bonus season and had written to all banks to make this point.
Barclays announced on Friday that it was capping cash bonuses at £65,000 as it reported a 3% fall in profits to £5.9bn.
Chief executive Bob Diamond admitted the returns to shareholders were “unacceptable” and targets set only last year may be missed.
Providing more detail about bonuses than usual, the bank said that the value of bonus per group employee was down 21% year on year to £15,200, while the average value of bonus per employee at Barclays Capital, its investment banking arm, was down 30% to £64,000 — just below the value of the cap. Last year the average bonus was £91,000.
The bank said that annual bonuses for executives and its eight highest paid employees were down 48%. Diamond received a bonus in shares of £1.8m in 2010 so, if he is in line with the average, this indicates that his bonus would be around £900,000.
Diamond again stressed the bank’s commitment to “citizenship” and repeatedly refused to disclose whether he had been offered a bonus, what the size of the bonus might be and whether he intended to take any payout.
Unions were also unimpressed with Barclays’ bonus announcements. TUC general secretary, Brendan Barber — who is calling for taxes on bonuses — said that the payouts show that “City bonuses have nothing to do with rewards for success”.
“Barclays were kept afloat by a taxpayer guarantee and multi-billion cash injection from the Bank of England. Today’s anti-austerity pay largesse adds insult to subsidy,” Barber added.
While the bank stressed that in 2011 bonuses were down 26% across the group and down 35% at BarCap compared with 2010, the proportion of revenue used to pay BarCap’s 24,000 employees actually rose to 47% from 43% a year ago. Revenue inside the BarCap operation — which Diamond used to run until being elevated to chief executive a year ago — was down 22% and the profits in that operation down 32%.
“Very weak Barcap revenues do most of the damage today,” said Ian Gordon, banks analyst at Investec. But shares were up strongly on Friday morning, rising more than 3% to 240p.
The bonus pool in BarCap was down 32% to £1.5bn — but the World Development Movement reckoned this would pay for school meals for two years for the “23 million primary age children who attend school hungry across Africa”. Some 20% of the profits generated by the bank — £1.3bn — were generated in Africa. Christine Haigh, campaigner at the World Development Movement, said: “Big bonuses encourage bankers to take big risks, not only with financial stability through their debt-based investment, but also with people’s lives”.
As a percentage of BarCap’s profits, the bonus pool was 35% versus 36% a year ago. The total bonus pool for the bank’s 141,000 employees was down 25% at £2.1bn.
The bailed out banks Royal Bank of Scotland and Lloyds Banking Group — where both bosses are not taking their bonuses — are subjected to a £2,000 cap on cash bonuses.
Diamond admitted that its return on equity was just 6.6% in 2011 — down from 8.8% the year before and well below the target of 13% set a year ago.
Diamond said: “We are not satisfied with the return on equity we delivered in 2011 and are committed to delivering steady improvement moving forwards”. He refused to drop the target, however, instead refusing to say when it might be met. “13% remains absolutely the right target and its very achievable, but we may not achieve it in 2013 given the impact of the external environment,” he said.
He was also unable to say whether net lending to small businesses was up or down on the year, but stressed that the overall lending to businesses under the Project Merlin deal with the government was up 3% — compared with the wider market which was down 5%.
“We really got on our horses to get businesses going,” Diamond said.
Diamond expressed concern about the lack of confidence among businesses who he said running high cash balances which they were refusing to spend.
He said the current mood towards the banking industry was “not a positive” but said, of the move to cut bonuses, that “we need to balance remaining competitive with being responsive to the public mood”.
He is yet to set out how the bank intends to respond to the recommendations to erect a ringfence around its high street bank from BarCap. But, he said: “Barclays’ universal banking model continues to be a competitive strength”.
The bank is paying a 3p dividend in the fourth quarter to shareholders, who had been lobbying the bank to reduce pay, taking the total for the year to 6p.