Mandelson launches fierce attack on Barclays banker

British Business Secretary Peter Mandelson today launched a fierce attack on one of Britain’s richest bankers, as Labour stepped up its pre-election sparring over the state of the economy.

Mandelson branded Barclays Capital president Bob Diamond “the unacceptable face of banking”, saying he had earned tens of millions of pounds by “dealmaking and shuffling paper around”.

Meanwhile, a political ally of Prime Minister Gordon Brown – former Paymaster General Geoffrey Robinson – said there was a sense of “moral dismay” among voters at banks continuing to pay massive bonuses to executives after the sector had to be bailed out with taxpayers’ money.

Barclays has previously denied claims that Mr Diamond was paid £63m (€70.8m).

But Mandelson told The Times: “If you look at Bob Diamond, who took £63m in pay – that to me is the unacceptable face of banking.

“He hasn’t earned that money, he’s taken £63m not by building business or adding value or creating long-term economic strength, he has done so by dealmaking and shuffling paper around.”

The minister went on say that his wealth “doesn’t mean to say different standards of morality apply”.

Mr Diamond, 58, is the number two at the bank and head of its highly profitable investment bank.

It was disclosed last month that he would bag another £6m (€6.75m) jackpot if his bank hit targets over the next three years.

Mr Diamond was awarded the shares under a new incentive plan for the years 2010 to 2012, the bank’s annual report said.

Mr Diamond also earned more than £20m (€22.47m) on the sale of his stake in the group’s fund management arm last year, although his huge rewards have acted as a lightning rod for criticism over industry pay.

He recently waived bonuses for the second year in a row despite a 92% hike in annual profits to £11.6bn (€13bn) – driven by a stellar investment banking performance at BarCap and the sale of Barclays Global Investors.

The bank acknowledged in February’s results the “intense public interest and concern” over pay.

Mr Diamond – who has a much lower £250,000 (€280,984) basic salary but has the potential to earn higher awards under share schemes – picked up 800,000 shares after tax for the bank’s performance during the 2007-09 period with a current market value of £2.9m (€3.25m).

Asked about Mandelson’s comments, Mr Robinson told BBC Radio 4’s 'Today' programme: “I do think there is a sense of moral dismay in the country as a whole that these banks – all of them, one way or another that are in they position they are in thanks to the action taken directly or indirectly by the government – are seeing these huge bonuses paid.

“I think we would all make an appeal to them to have a proper respect for public opinion.

“I think the whole country feels this. They are going through a tough time and it is not going to get any easier and it could get tougher and we have certain sectors which are doing extremely well – the top end of most businesses and the banks quite egregiously so.

“I think that they have got to realise that there is a nation here that has a national problem and they should play their proper part in resolving it.”