Peter Kenyon

Darling, the 2009 Budget had better be appealing

The latest opinion poll is not flattering for the Labour Party in the wake of Smeargate revelations, according to UK Polling Report. As a firm believer in government's losing elections, rather than opposition parties winning them, what is left in the locker? There were two national Labour Party Conferences today Local Government in London and Young Labour in Gillingham. Neither seems to have made the national media schedules. Instead, the BBC and others started the day with the cancellation of the PPC selection in Erith and Thamesmead - a 'safe' Labour seat following the 'discovery' of a broken ballot box seal at Head Office. The day ended with reports of further Smeargate allegations in the News of the World concerning the Labour Party's General Secretary Ray Collins. I have no insi information about either saga. All I know is that at today's Young Labour Conference Sam Tarry was elected chair - unopposed. And at the Labour Local Government Conference an overwhelming majority of representatives voted in favour of increased COUNCIL house building to address local needs. These are both very encouraging developments for those of us who have decided to keep paying our membership subs and fight for what we believe in inside the Labour Party. Pity about Alice Mahon. I was appoached by BBC Radio 5 Live to 'appear' on its 11pm show (Sat night), but not called. I am not particularly sympathetic to Alice, havinf decided to stay inside the Party and fight for what I believe in. BBC 5 Live asked John McDonnell MP instead.

That's why Darling, the 2009 Budget due to be announced on Wednesday 22 April had better be appealing. By that I mean it has to address the need of the many, not the few bonus rich bankers and others motivated by greed. If Brown and his Chancellor get the economy on a better footing than anyone dared imagine six months ago, my hunch is that we still have everything to fight for electorally.

We have just got to get more savvy about the messages, and the medium - the next election is still to b won by Labour by addressing local needs via a global consnsus aout ow to deal with bankers adnd their balance sheet.

Tories demand support for bank lending, silent on risk rewards

Telling isn't it. Conservative Home is whinging about just how many times they have demanded loan guarantees for bank lending from the Labour government, but is completely silent on the issue of executive pay for bankers.

I'm not opposed to the state guaranteeing bank loans or even setting up a state-bank (though I would prefer a people's bank as it's the people's money that would be used to capitalise such an institution). But surely there has got to be a fundamental reassessment of rewards/remuneration and their relation to risk-taking.

No banker requiring government guarantees for its loan book can be worth more in income terms than say the Prime Minister. Pay cuts for bankers would help their banks recapitalise more quickly too.

Pips squeak politics revisited

Apologies for delayed action blogging. But you might relish the ideas. Last Sunday reviewing the papers on Andrew Marr's BBC 1 TV AM programme, Baroness Shirley William chose as her top story the lead in the Observer's business section on Obama tax haven crackdown. In these troubled times when bankers have had to be bailed out by governments of right, left and centre political persuasions, I wondered how long it would be before someone recalled a misquoted mantra of the 1970s – “tax the rich until the pips squeak”.

I think it is worth while revisiting the circumstances in which it was alleged to have been said at the 1973 Labour Party conference by the then Labour shadow chancellor, Denis Healey.

According to William Keegan, who interviewed this Labour legend (the best prime minister we never had – some say) in 2006, Healey never came out with the quote that the Conservatives are still fond of digging up, namely that he wished 'to squeeze the rich until the pips squeak'. Healey said: 'I never used it. I quoted something from the 1920s....' What the then shadow chancellor in fact said, at Labour's 1973 conference, was 'there are going to be howls of anguish from the 80,000 people who are rich enough to pay over 75 per cent on the last slice of their income'. The 'pips squeak' was originally used by First World War leader Lloyd George; Healey did quote fellow Labour Cabinet minister Tony Crosland, requoting it 'in reference to property speculators, not to the rich in general'.

I wonder what's inhibiting Cameron's Tories today?

Executive pay, reward, failure: Pandora's box

I wonder if our Labour Party Leader Gordon Brown numbers any senior executive remuneration experts among his friends and acquaintances? My immediate reaction to the bank bailout story was to ask on Robert Peston's blog if he could do a sidebar on severance packages for humbled British bankers. This blog has taken an astonishing number of hits since 0800 this morning. Then I spotted Nick Robinson goading the government about other nationalisations. Cheap political points when the global banking system faces systemic failure seem inappropriate in the circumstances. I asked him whether he shouldn't be taking a closer look at senior executive service contracts.

As always in life the devil is in the detail, and this one escaped the box long before anyone anyone could write at all, let alone draft an employment contract.

In his speech at Reuters earlier, Gordon said:

As you would expect the government will protect the taxpayers interests at all times. So as part of this plan we are laying down clear conditions to ensure that the taxpayer gets a fair deal.

· no rewards for failure.
· no cash bonuses this year for the boards of banks receiving public money
· no dividends paid until the government’s preference shares have been fully redeemed

And future remuneration will be based on performance and long-term value creation.

All I would urge, prime minister, is proceed with caution - what you are proposing amounts to the re-writing of every single senior executive service contract currently in operation. I have never come across a single one that didn't make reward for failure pretty much a foregone conclusion. If anyone has a pro forma service contract that avoids such perverse outcomes, please let me know.