Afternoon:
10°c
Today's figures from RBS cap a week of good results from the banks, with all of them signalling recovery if not increased profits.
RBS, now 70 per cent publicly owned, achieved a modest £15 million point profit in the first six months of this year, having written off £7.5 billion of bad debts. Northern Rock and Lloyds showed signs of recovery despite huge bad debts and write-offs, while Barclays and HSBC, which never took any public money, made substantial profits. The banks' success is encouraging; we need healthy banks for a recovery. Yet they make the City look increasingly out of step with the real economy — not least in the bonuses paid to banks' senior executives.
Today RBS chief executive Stephen Hester looks set fair to achieve his full £9.6 million bonus. While he has achieved much in turning around the stricken bank, this is surely a wildly disproportionate reward. Others will win handsome bonuses on the back of this week's results, especially from the resurgence of investment banking. They are making money relatively easily: this week it was reported that Goldman Sachs is at present making $100 million a day in trading alone.
Yet only yesterday the Bank of England felt it necessary to announce that it would pump another £50 billion into the economy through quantitative easing, warning that the recession was even deeper than previously thought. That view reflects deep consumer gloom, job losses and the continuing difficult of many businesses in getting credit from the banks. Despite some signs of green shoots, the Government's prediction of a recovery by the end of this year still looks at best distinctly optimistic.
Against this backdrop, bonuses like Mr Hester's and the jubilation of the City this week will further irritate the public. Once again, ministers and civil servants need to explain why they agreed such lucrative remuneration in what is a largely nationalised bank — an institution that would have gone to the wall had it not been bailed out by the taxpayer.
And if the City is incapable of modesty over bonuses then it must face the risk that public bewilderment will force ministers into taking a more punitive line.
Theatre boom
Despite, or perhaps because of the recession, London theatre is booming. Today's figures from the Society of London Theatre show that attendances and box-office takings for the first six months of this year are up on the same time last year. Big foreign audiences have been boosted by staycationing Londoners. But encouragingly, it is not just musicals that are prospering.Straight plays continue to do well. This week Waiting for Godot closes after an hugely successful West End run, with punters queuing through the night to get the last few tickets.
This production may have had the draw of Sir Ian McKellen and Patrick Stewart, but for one of the bleakest works of that bleakest of writers, Samuel Beckett, to take more than £5 million is astonishing. Sir Ian says: “I've never been in such a success on stage.” We cherish London theatreland's ability to throw up such surprises, and to stay vibrant whatever the economic climate.
Cycle Friday
There is much to be said for cycling to work — it's cheap, healthy and mercifully independent of the vagaries of public transport. But, understandably, novices are often frightened of London traffic.
The new Cycle Friday scheme, which the Mayor launches next week, aims to make it easier: it will enable seasoned cyclists to guide those new to using bikes in London through the roads to their place of work, on several designated routes. The scheme will run for eight weeks.
It promises to introduce many people to the pleasures of cycling and help guard them against its perils, and is testimony to the public-spiritedness of the volunteer-guides. Let's hope Cycle Friday extends to the rest of the week.
