WHILE most of us are struggling to cope with a huge rise in the cost of living and wondering how we’ll pay energy bills – which are literally doubling – champagne corks are popping in the city of London.

In fact, so joyous is the reaction of bankers to news of the massive bonuses they will soon receive that many top brands of fizz have been cleared from the shelves. They certainly have a lot to celebrate.

The figures are mind-melting. Research by financial data analysts Refinitiv for The Guardian newspaper reveals that London’s mergers and acquisitions bankers earned total fees of £2.6 billion in 2021 – the highest since Refinitiv began keeping records in 2000. London’s big four banks – HSBC, Barclays, Lloyds Banking Group and NatWest – are now expected to pay out bonuses worth a total of more than £4bn.

If there’s one thing that can be said about London’s banks without fear of contradiction it is that they have very short memories. It’s not so very long ago that they had to be bailed out of a crisis entirely of their own making with trillions of dollars of public money.

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The facts speak for themselves: HSBC agreed to pay $765 million over allegations it passed on toxic mortgage securities to investors before the global financial crisis of 2008.

It also paid a fine of $470m imposed after American federal and state investigations into alleged abuse against homeowners trying hard to pay their mortgages during the global financial crisis of 2008. The bank was accused of signing thousands of foreclosure documents, some leading to evictions, without properly reviewing the paperwork.

Barclays agreed to pay a $2bn fine to resolve a fraud case involving mortgage derivatives – a type of financial investment instrument that depended on the underlying value of home mortgages and which were blamed for fuelling the 2008 crisis.

The bank also admitted manipulating Libor, a benchmark interest rate that was the basis for trillions of dollars of financial transactions, between 2005 and 2009.

Lloyds TSB saw its first-half profits drop by an incredible 70% in July 2008 and lost more than £865m in the disaster. After it stepped in to rescue HBOS that September it announced £11bn worth of losses in that bank the following September.

Lloyds Bank plc and Bank of Scotland plc – both part of Loyds Banking Group – were fined £105m for serious Libor and other failings between 2006 and 2009.

The last of the “big four” banks, NatWest, is the current name of the former Royal Bank of Scotland, which from around 2000 made a number of acquisitions in a bid to become one of the biggest companies in the world. Serious problems emerged after RBS led a consortium to buy the Dutch bank ABN Amro.

During the financial crisis of 2008, RBS shares lost 87% of its value. On the morning of October 7 that year RBS chairman Sir Tom McKillop called then-chancellor Alistair Darling to warn him that the bank was hours away from running out of money. Billions of pounds of public money was ploughed into RBS, with the public eventually owning 84% of the bank.

RBS later paid $4.9bn to settle charges that it misled investors ahead of the 2008 financial crisis. The Royal Bank of Scotland formally changed its name to NatWest group in July 2020.

So how much did the 2008 financial crisis actually cost the British taxpayer? That’s a good question but a difficult one to answer definitively. In its second report into the cost of the 2008 bailout two years later the National Audit Office estimated the scale of the support by then provided to UK banks had fallen from a peak of £955bn to £512bn. But the amount of cash borrowed by the Government to support banks had risen by £7bn [to a total of £124bn] in just a year.

By March 2011 the reported figure was £456.33bn, but that’s still not the final figure as some of that sum has been repaid. But we don’t need to know the exact figure to acknowledge that a considerable amount of taxpayers’ money was crucial in the rescue of the banks.

It’s reasonable to ask what assurances those taxpayers were given in return. Eight financial firms will participate in a rescue scheme, described by Alistair Darling as a “government-supported recapitalisation scheme”. They were: Abbey, owned by the Spanish bank Santander, which is also home to Alliance & Leicester and parts of Bradford & Bingley; Barclays; HBOS, owner of Halifax; HSBC Bank, the UK arm of the giant HSBC Holdings; Lloyds TSB; Nationwide Building Society; Royal Bank of Scotland; and Standard Chartered.

In 2008 it was reported that banks which the Government ended up owning stakes in were likely to be subjected to tough criteria on what they paid executives. The Financial Services Authority was supposed to be working on plans to ensure that pay schemes within the banks do not encourage too much risk-taking in pursuit of big bonuses.

Then-prime minister Gordon Brown told MPs: “We are in discussion on a case-by-case basis with the banks who want to take up this scheme, about what will be the level of executive remuneration but particularly the bonus system, which has caused so much difficulty. Our aim is to support and reward work and enterprise and responsible risk-taking, but not to reward irresponsibility in risk-taking and excessive risk-taking that has caused so much damage.”

Less than 20 years later, we are emerging from a global pandemic facing yet another economic crisis, this time causing catastrophic problems for victims of an economic system which protects the interests of the rich at the expense of those who have worked hard through health scares and yet now find themselves unable to put food on the table and keep their homes safe and warm at the same time.

Those suffering from the cost of living and energy price surges did nothing to cause either. They paid the prices deemed fair and reasonable by supermarkets and energy producers. Yet now they are being told that it is no longer enough. So far the only financial help on offer from a moribund UK Government comes in the shape of a £200 loan which will have to be repaid in £40 instalments over the next five years – and a £150 council tax rebate, or the equivalent in Scotland which already has a council tax support scheme.

The contrast with the help given to the banks could not be more stark. Yet the banks are back to their old tricks of handing out huge sums to those who work for them on the pretext of keeping hold of talented staff who they claim would otherwise go to work for the highest bidder.

Bankers’ reward after the “tribulations” of Covid – “trials” such as working from home, remaining in highly paid jobs and enjoying pay rises while millions have suffered a pay freeze for years – is to pocket huge bonus payments. And just to rub salt in the wounds, this news comes hot on the heels of an appeal from Bank of England governor Andrew Bailey asking workers not to seek pay rises to help control soaring inflation.

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Let’s be clear: bankers should for the rest of their working lives be grateful to the taxpayers whose sacrifice and had work kept them in a job when the misdeed of their employers brought the world the brink of financial ruin.

Those same bankers should hang their heads in shame at taking a single pound in bonuses when taxpayers are now struggling to feed their children. The UK Government should seize those bonuses and use them to offset rising energy and fuel bills (and while they are at it, demand the massive pay rises awarded to power company bosses be used for the same purposes).

A rising tide of public fury should carry away a Westminster government driven by greed, self-interest and a cruel indifference to poverty under whose watch the UK has increasingly become too complacent to care.

And Scotland should finally realise that the game is up for a union unable to rise itself from a slumber that keeps it in thrall to a ruling class looking to bleed it dry of money, principles and hope.