Baleful Barclays

It has been announced that Barclays Bank are to cut 10-12,000 jobs in 2014, 7,000 of which will be in the UK. This comes hot on the heels of the 7,650 jobs axed only last year. Chief Executive Antony Jenkins cited ‘loss of profits’ as the reason for giving 9% of his staff the sack, 92.5% of whom will be front-line workers.

Some of the primary causes for this loss of profit have been the costs of ‘internal restructuring’ and paying legal costs. £1.2 billion alone has been spent on the ‘Transform’ program to change Barclays into a ‘better-behaved’ bank, i.e. to operate legally within regulatory guidelines.

These changes come in the wake of a series of scandals surrounding Barclays, including being the market front-runner in mis-sold PPI, fined £290 million for rigging Libor interest rates, forced to dissolve their tax avoidance division, as well as thousands of files of customer data being leaked and sold. This is not to mention the central role the finance sector as a whole played in the 2007-8 crash, which has devastated millions of lives around the world.

It is clear that banks like Barclays do not feel they bare the responsibility for the destruction they have wrought. Just as the burden of the crisis is being passed on to the public in the form of the cuts, so too the price of Barclays’ illegal gambling and profiteering is being passed on to their workers in the form of job losses.

The latest affront came when it was revealed that at the same time thousands are being laid off, the bank’s ‘bonus pool’ for 2013 rose by 10% to an eye-watering £2.38 billion! Investment bankers in particular are seeing an increase of 13%! (£1.6 billion) Since public money was used to bail out the banks they have paid out twice as much in bonuses than in Corporation Tax, with Barclays in 2012 paying £82 million in CT whilst having a bonus pool of £2.1 billion!

In response to mounting criticism, Jenkins said “we have to be competitive on pay and we have to pay for performance”. Yet in 2013 investment banking profits were down 37%! The new CEO was anxious, however, to reassure shareholders that the bonus increase was in their long-term interest – but clearly not that of the sacked workers! Despite Barclays’ profit slump, their pre-tax gains were still £5.2 billion for 2013. The pocketing of this at the expense of providing secure employment starkly reveals their priorities.

Jenkins’ attempt to take the bank’s image away from the ‘aggressive culture’ of former boss Bob Diamond may win over the shareholders, but I doubt those now finding themselves unemployed see the move as non-aggressive. He and a few other top dogs may waive their bonuses for a few years as a token gesture, but for these workers they’ve waived their livelihoods.

It is obvious that the banks are incapable of restraint when there’s the potential to make a quick buck. Improving trade union membership amongst finance workers is a key first step towards fighting back against these attacks. Ultimately though, unless the banks are taken into public ownership there will be no stopping the practices of gambling and corruption, and the public will inevitably be footing the bill.