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Why I asked Lord Mandelson if he is the new "Sheriff of Nottingham"

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John Sweeney | 10:51 UK time, Monday, 21 September 2009

Tackling the politician known as the Prince of Darkness is not for the faint of heart

Lord Mandelson, the Business Secretary, was running the country while the prime minister was on holiday when I caught up with him for our story into Britain's banks one year on from a massive £86bn taxpayer-financed bail out.

Oozing power from every pore, he was in Nottingham to launch yet another government scheme to help hard-up firms.

The government has given about half a billion pounds to firms, which sounds a lot until you compare it to the £86bn they have given the banks. The particular scheme he was launching in the land of Robin Hood is worth £75m.

So my question to the First Secretary pretty much wrote itself: "It's only £75m quid. And the government is giving billions to the banks. Some people might say you're robbing from the poor taxpayer and giving to the rich bankers. Lord Mandelson, are you the new Sheriff of Nottingham?'

Off he went, each phrase expertly articulated.

To my mind he wasn't answering the question, so I had another go - 75 million (for small businesses) plays billions (for the banks)? A beautifully coiffed eyebrow lofted skywards. The Prince's features framed a question mark: "If I can just ask, where are you from?" came the question.

From BBC Panorama, I replied.

Up shot the other eyebrow: "BBC Panorama, I could have guessed." Long sigh. "I don't think that the cynicism that you seem to be bringing to this subject is worthy of the task in hand and it's a big task and it's a big challenge."

I interrupted him to ask why my question was cynical.

Lord Mandelson popped me on the naughty step. He announced that he would take my questions last.

While the camera was looking the other way, his chief press officer, a soft-spoken Irishman called Peter Power, told me that I could have one more go, but that I couldn't interrupt with any more cynicism.

I did a bit of philosophy in between my degree in drinking at LSE. Diogenes The Cynic is my favourite philosopher. He once told the ruler of the Known World, Alexander The Great, to "get out of my light." Two and a bit thousand years on, nothing very much has changed.

When it was finally my turn, I asked Lord M about bankers' bonuses. He said, lengthily, that the bankers had taken excessive bonuses in the past. Aha! I thought and pounced: "But you're the Business Secretary, why can't you stop the banks having bonuses?"

He placed his hand on my back and said, softly: "Thanks."

I did not give up: "But you are the Business Secretary. Why can't you stop the banks having the bonuses?"

There was no reply.

I tried one last time. "No last word on bankers' bonuses?"

Silent, enigmatic, he disappeared into his black space cruiser and was gone.

You can watch some of our brief encounter here.

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  • Comment number 1.

    Well done John. You showed up Mandelson for what he is. An arrogant unelected politician who is out of touch with the the electorate. Whatever his agenda his behaviour and attitude is not conducive to the re-election of the party he is supposed to love and support.

  • Comment number 2.

    Wouldn't it be nice if we, the taxpayer part-owners of these dishonest banks, simply moved our accounts to other banks every time we heard of such immoral practices? I suspect that we could even move them to equally dishonest banks because, seeing the opportunity for a quick buck, they would be only too happy to take business from their competitors. Who knows, it might even lead to them realising which side their bread is buttered.

    There must be some way that those of us who care can stop the banks biting the hand that feeds them even if Peter Mandelson won't.

  • Comment number 3.

    I have a lot of time for Panorama however shame for your portrayal of bank bonuses . . you continually weigh up the 500 mln paid in bank bonuses alongside the govt money to prop up banks. A fair concern, however how many employees of LTSB or Nthn Rock are getting paid big bonues? Whats the average wage at LTSB?
    I fully agree that execs of these banks that received government money should not recieve a cent, however your show insinuates quite heavily that all banks are in the same situation. When you talk about "bankers huge bonuses", aside from the very top execs at high street banks you are talking almost exclusively about investment banks, and here's the thing - the taxpayer didn't pay a cent to any of these. The remainder (and the vast majority) of high earners work at hedge funds and in other related parts of the finacial sector. They did not take any taxpayers money and they certainly don't offer you an overdraft facility or a home loan.
    Instead maybe you should be focusing on the fact that in choosing to save these pathetic excuses for private enterprise (I mean LTSB, Northern Rock, et al) we have been left with a failed system of failed institutions, instead of letting them go bankrupt and allowing the capital, the customers, and the rewards flow to the stronger survivors (say . . HSBC, Santander ie). They are the ones doing the lending and they would be doing a lot more if we had left things alone.
    That is how the system that made the UK and the US so wealthy and succesful works, it may seem tough but it rewards success and punishes incompetance. By bailing these banks out we have rewarded failure.
    And why you ask? Simple. Because when everything is good we want it good and cheap and all in our favour - all the time, and when it goes bad . . . . nobody (and I mean the public - every single individual rich or poor or in-between) wants anything to do with the consequences. We bailed the banks out for ourselves. Nobody wanted to lose a cent even though we had all been borrowing and leveraging like crazy.
    So we all got our bailout and our protection, and now we have a banking sytem populated with Zombie banks. What did we think was going to happen . . . . . it would all magically come back.

  • Comment number 4.

    I dont think anything in this programme was new to me really, but it actually made me feel physically sick, listening to the bankers and peter mandelson. The view that only silly people dont realise life is unfair and so what anyway. It feels like the bankers are actually holding democracy to ransom, pay us vast amounts or we will leave you to go to more lucrative shores and it would serve you silly lot right. A very good if sickening programme.

  • Comment number 5.

    I'm sorry, but I am quite annoyed at this highly simplistic portrayal of a highly complex situation.

    Take, for example, your item with the couple that were wanting the 10% deposit mortgage. Why do you still expect the banks to engage in the same lending practises that they were doing before the 'crunch'? The higher deposit reflects a desire to take on less risk, and this is an unfortunate part of the new reality. On the one hand you are castigating them for having been too risky, and then, by implication, complaining that they aren't being risky enough! Maybe the couple should really be asking why the house they want to buy is still so expensive? Is it not really a failure of government house building policy? Or a failure to use interest rates to control house-price bubbles during the benign economic period?

    Hectoring Mandy might be fun, but it doesn't clarify the basic facts. If the banks stop, all western finance stops, so there is no choice but to backstop them until trust returns to the markets. If there was no bail-out, you would have a much larger pool of worthy individuals who have been ruined by the crisis to interview. Again, the banks need to hoard money to fix their own house, and adopt less risky practises, and this is why they are withdrawing credit facilities. Not nice and unfair? Yes, and I commiserate with those people who have been made redundant or bankrupted. The music has stopped and some people have found, through no fault of their own, that there's one less chair. We have all been bingeing at the cheap debt party, and now we have a hangover, and have to learn to live without so much easy money.

    Also, all this talk of limiting bonuses is a joke - the 'cynic' in me, thinks that it means the politicians can 'fix' that issue to satisfy the electorate, and use it as a smokescreen to avoid making any more meaningful changes (i.e., break up those institutions that are too big to fail, so that large banks don't rely on implicit state guarantees during crisises).

    The fact that John Sweeney is duped into pursuing the populist 'bonus' line rather than a more meaningful investigation, suggests that I might be right...

  • Comment number 6.

    Ludicrous behaviour from the banks that WE own. Good job that ActionAid had brought together the Outlandish Revenue Service, to pressure the government & G20 into action. John Sweeny (and indeed everyone else) are very welcome to join up and help us create a Seriously Serious Public Service Announcement on tax justice here http://tinyurl.com/mggmbw

  • Comment number 7.

    Ludicrous behaviour from the banks that WE own. Good job that ActionAid had brought together the Outlandish Revenue Service, to pressure the government & G20 into action. John Sweeny (and indeed everyone else) are very welcome to join up and help us create a Seriously Serious Public Service Announcement on tax justice here http://tinyurl.com/mggmbw

  • Comment number 8.

    Why not pose the question - we can find billions to bailout undeserving banks and their averacious upper staff and yet 50,000 pounds to repair the roof of Shakespear's Church cannot be found?

    I suggest that, at the very least, this amount, should be donated by each of the receipients of those unspeakably obscene and undeserved golden handshakes and bonuses allowed by politicians and the oldboy network.

    I haven't heard that one of these bailed-out institutions or individuals has even got the public relations sense to offer the money to Shakespear's Church or any other good causes - only that they are budgeting for more bonuses and protecting their own upper echelon salaries / pensions - rather than making continuous reasonable term loans to well researched deseving projects and cases for the general good of the country.

  • Comment number 9.

    I have just watched the latest programme on banker’s bonuses and I am shocked how the standards of journalism and intelligent discussion have fallen in the BBC.

    In the past Panorama was seen as a serious programme delivering informed analysis on a subject, however this programme was a hatchet job which tried to provide the same comic effect as Rogue Traders.

    I work for a large British Bank which has not been rescued by the tax payer as it did not take excessive risk, but if you listen to your programme or the majority of the BBC’s comments, you would assume that every bank had been rescued.

    I am also not one of those bankers who receive the types of bonus you are talking about.

    No matter what you feel about bonuses, as the man from the City Chamber of Commerce rightly said, unless there is international agreement having the UK stopping bonuses will have the effect of having these people (and the effective high tax rate on bonuses, move to another country). Remember, to pay £1 billion in bonuses, the tax man is picking up more than half of this between employer and employee tax. I am sure the Swiss would be very happy with the extra income from the UK bankers turning up to work in Zurich.

    This is not a morale argument it is an economic one and no matter what people feel about this type of banker, loosing the city as a centre of finance at this stage means loosing ongoing revenue to the treasury.

    To dumb this down to your level, this means raised taxes and cuts in public spending.


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