Rishi Sunak’s beloved bankers will not be helping us out of this cost-of-living crisis

Don’t go expecting governments to step in to clean up the mess created by their policies in the shape of the cost of living crisis. That is very definitely not their job, said the bank’s caring, sharing president David Malpass.

It’s simply too expensive to help everyone facing frighteningly high fuel bills, sky-high mortgages and rocketing food costs, he said. The bank is clearly miffed that governments stepped in to ease the potentially catastrophic cost of Covid instead of letting businesses close and people starve.

It is not about to let the same “mistake” happen again.

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“Governments are saying we will take care of everyone, which is just too expensive,” Malpass told the BBC.

Call me crazy but shouldn’t the world be run to make our lives better rather than cast us aside whenever the going gets tough for the markets to protect us from the unexpected disasters which have befallen us in recent years?

The World Bank boss agreed there was an accepted economic view that there should indeed be a “social safety net” to offer some protection for people during a crisis.

But his gripe was that the Covid support went to everyone and not just those who fitted his definition of being deserving of help.

“Now the consequences are coming home. People will be left for years paying for that debt,” he warned.

I’m not sure exactly what system the World Bank would have preferred to put in place. Huge numbers were placed on furlough and without that 80% support in place, the “consequences” don’t bear thinking about. As far as I’m concerned, the £305 trillion in global debt racked up is money well spent.

Of course, the global economic system makes sure there are penalties for such wanton extravagance. These include a global inflation rate, which is expected to remain at 9.5% until 2024.

As a result, low-income countries are defaulting on loan payments, which is another “consequence” bankers take a dim view of.

Of course, bankers themselves have wrought financial havoc on the world. The financial crash of 2008 has been described as the “greatest jolt to the global financial system in almost a century”. £90 billion was wiped off the value of Britain’s biggest companies in just one day.

Our money bailed out the banks. The National Audit Office estimates that at its peak of British support, the banks reached £1.62trn. I can’t recall any bank arguing at the time that the cost of saving the banking system from collapse was too high. Or that we simply couldn’t afford it.

Were the bankers punished for the dodgy practices which contributed to this crisis? It’s true that there was a cap on bankers’ bonuses, which we should remember were ridiculously high and paid on top of already substantial salaries.

The cap, which came into force in 2014, limited bonus payments to twice the recipient’s annual salary. Do you know anyone who can reply on a bonus of that size every year? Thought not. So I think it’s safe to say that the cap was not exactly the worst punishment in the world. Given the circumstances, it was some way short of even a slap on the wrists.

Even that measure was roundly criticised by the financial world. The Bank of England is keen to let it be known that it never supported the cap and said this week that there were more effective ways to ensure banks account for risk.

Why is the cap on banker bonus payments back in the news? Because scrapping the cap was one of the last acts of Liz Truss before she faced the inevitable and resigned, describing the action as one of the “difficult decisions” she was being forced to take to “boost the economy”. No doubt another of those difficult decisions was cutting taxes for her rich friends while the poor further slipped into poverty and despair. Difficult for whom exactly? Certainly not the bankers who can now expect to bring home even more cash at the end of every year.

When she was asked by BBC political editor Chris Mason if she was happy to see the rich getting richer, Truss said: “What I want to see is a growing economy. If that means taking difficult decisions which are going to help Britain become more competitive … more attractive, help more investment flow into our country, yes, I’m absolutely prepared to make those decisions”.

OF course, she didn’t explain how giving more cash to wealthy bankers will achieve those aims, probably because even the former prime minister can’t embrace the trickle-down philosophy and keep a straight face.

Rishi Sunak has wasted no time in ditching the vast majority of initiatives included in the disastrous mini-Budget announced by Truss and her chancellor Kwasi Kwarteng. Reversing corporation and dividend tax rises? Gone. The end of the top rate of income tax? Reversed. The one big ticket item still standing? The scrapping of the banker bonus cap.

It’s hardly surprising that a Tory government is bending over backwards to make the rich richer, especially if it achieves its main aim of making the poor poorer at the same time. There’s nothing the Conservatives like better than kicking someone when they’re down, and they have certainly had plenty of practice recently. That’s what makes them so detestable.

But you might have thought that Sunak would have taken a little more account of the optics. You might have thought that having got rid of one rabid right-winger, the new Prime Minister might have tried to build bridges and present a softer, more caring face to the country.

Certainly, such hopes were smashed into smithereens by his re-appointment of Suella Braverman as Home Secretary, which made this week look less like the dawning of a new day and more like the rearrangement of chairs on the Titanic.

Nothing about Rishi Sunak suggests he is open to even minor economic reforms which are needed to address the wide and growing chasm in this country between those who have very little and those who have far more than they need.

Reforms supported by, ironically, a report published by the World Bank itself way back in 1986, which found that people who lived in socialist countries enjoyed a higher level of health, education and overall physical quality of life than residents of capitalist countries with similar economic development.

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The study looked at infant and child death rates, life expectancy, the availability of doctors and nurses, nutrition, literacy and other educational factors and, in nearly every area, socialist countries outperformed capitalist ones.

The current reaction to the cost of living shows exactly how little the world learned from that report. The World Bank’s dire warning about the cost of protecting the public resonates with the approach of a UK Government which prioritises boosting the bonus payments to bankers who remain in a job only because the British taxpayer bailed them out over the wellbeing of those same taxpayers when they find it increasingly hard to pay their bills.

This is just one reason why the current imperative in Britain is to demand an end to the farce which has now installed two prime ministers with no mandate to govern (and yes, I know we vote for the party and not the prime minister, but this lot are nevertheless taking the proverbial).

We need a General Election, and our politicians, our trade unions and our social and cultural institutions have a responsibility to put differences aside and join forces to demand one now. We can’t afford to stand by while the elite who run the UK stuff their pockets, and the rest of us go to hell.