As Alistair Darling weighs up how to finally get tough with the bankers over their preposterous and obscene bonuses, it is important that we put a £1 million bonus in perspective by considering what such vast sums of money would mean for wider society were they be put to use in socially useful endeavours which benefited the wider community. The issue can be illustrated by considering just how the effects of how recession-inspired spending cuts proposed by both major parties will trickle down to the local level.
All too often, when local authorities either seek to make cuts or are required to do so by central government the axe falls on those services or grants which are known euphemistically as 'Cinderella services.' Councillors and local mandarins know all too well that voters are acutely aware when a care home, or children's centre faces closure. Rightly, there are often vocal local defenders to fight for continued funding. So councils look for softer targets, areas of spending which will not attract such attention and vocal opposition. Areas that most voters would not view to be core, essential services. Sadly, these include youth cafés, music centres, local volunteer radio stations, arts centres, local orchestras, galleries, music festivals, arts festivals and the like. These projects are all too often victims of a tendency towards cultural ignorance and short-sightedness on the part of local councillors and mandarins. They fail to realise that a local volunteer radio station, or an orchestra, or an arts centre often provides a cultural oasis for people in lives which are increasingly stressful, and time-poor and that such investment reaps hugely positive dividends for the wider community which are real, but often unquantifiable by the ranks of officialdom.
We live in an age when there is a perception amongst much of the public that young people are a threat, when young people themselves all too often are right to claim that there is nothing for them to do, and now, thanks to the recession caused by bankers' greed, face an increasingly uphill battle to find employment. And yet, up and down the country, youth cafés such as the Chill-Out-Zone in Newent, Gloucestershire, face closure because their £5,000 grant is a victim of what local councillors claim are unavoidable budget cuts. As this is happening at the local level, we discover that at the height of the financial crisis last year, the Bank of England, and by extension, the Government, found £62 billion in additional lending for RBS and HBOS without batting an eyelid. We also discover that the total cost to the taxpayer of the bailout of the banking system will reach £131 billion by the end of the year.
That's 131 thousand million pounds to shore up the banks which caused the worst recession in living memory, which is itself going to be used as the justification by central and local government to make huge cuts in public spending. When you think of it like that, a £5,000 grant to help keep a youth café open seems like a very reasonable use of public money. It also brings into sharp relief the ridiculously large sums of money that the banks are hoping to pay out in bonuses this year and makes the comments by FSA Chair Adair Turner that some of what the investment banks do is "socially useless" seem all the more fitting.
Perhaps we should think about bankers' bonuses in terms of what these huge sums of money could do for the young people in our communities. One example is a youth café in Aldershot, run by Christian organisation The Source. It is facing closure as the recession has led to its funding grants to dry up. According to reports, it provides a range of services for 800 disadvantaged young people and costs £300,000 to run each year. So for every banker receiving a 1 million pound bonus, 2,400 young people could have a positive place to spend their free time rather than roam the streets. Of course this is a simplistic calculation and perhaps this café is not representative. But the point remains a valid one.
Alistair Darling is absolutely right to ignore the siren voices, or some would say bleating of the City and its defenders as he tries to do at least something to curb bonuses earned on the back of taxpayer largesse. His supertax will hopefully strike a limited blow for all those who are angry that those who engage in often socially useless economic activity, which has so recently imperilled the entire economy, caused massive unemployment, contributed to a huge fiscal deficit and most importantly, caused vast amounts of human misery in the form of lost businesses, lost jobs, depression, anxiety and loss of self-respect, should be rewarded in ways that ordinary people can only dream of. Even the BBC is discovering that the public is increasingly concerned about over-inflated pay in both the private and public sector. Perhaps the public will increasingly feel aggrieved that their local services, including the 'Cinderella' ones they so cherish, are to be sacrificed due to the avarice of the banking sector.
One way of preventing this would be for the Government to put into statute a law preventing either councillors or officials at local authorities from cutting funding for music, arts, drama and youth-related projects as part of any central government-inspired spending cuts. Let them find savings in their back offices, their perks and their inefficiencies, not the cultural life of our communities. Hopefully, we are entering a time when we collectively begin to question the way in which the market places value on various activities. We are all too often told that the future prosperity of our country resides in the Square Mile. This is misguided in the extreme. The City is of course very important to UK Plc, but nothing is more important than the provision of socially useful things for people (particularly young people) to do in our communities. The two are not mutually incompatible, but now is the time to speak up in defence of 'Cinderella' services before the axe falls.