| 7.8°C Dublin

Nicholas Leonard: Politics trickier than economics for Cameron

British Prime Minister David Cameron has found a new way of coping with the tensions of Downing Street. Having risen to the highest level on the iPad game, 'Angry Birds', he has now moved on to playing 'Fruit Ninja', which offers "touchscreen fruit destroying and social networking smoothie madness", as well as personal guidance from a ninja "sensei", a venerable Japanese-style mentor.

Mr Cameron will be in Brussels today for the EU summit on saving the eurozone. Although the Germans and French are still furious with him for voting against a new treaty last year, Mr Cameron will be in all-out smoothie, networking mode today.

To the intense anger of his anti-Europe right-wingers, he is now ready to endorse a big increase in Britain's loans to the IMF, even if the money is going to be used indirectly for salvaging the stragglers in the eurozone.

The chancellor, George Osborne, said last week: "We are not in the euro, we don't want to be in the euro, but do we want to be in the IMF? The answer to that question in my mind is yes."

Both Mr Cameron and Mr Osborne are relieved that Christine Lagarde, the new head of the IMF, has endorsed their tough austerity measures for trying to get the British economy back on track.

But winning over the IMF has proved much easier than coping with political pressures back at Westminster. Rebel bishops and peers in the House of Lords last week blocked, at least for a time, their controversial plans to put a cap on the amount of money that individual families can claim in welfare benefits.

Despite mutterings from their Lib Dem colleagues in the coalition, the Conservatives will eventually be able to push this reform through in the Commons. But they have not been helped by an embarrassing row over plans by the RBS banking group to pay a bonus of almost £1m (€1.2m) to its chief executive, Stephen Hester.

RBS, which was previously run by the notorious 'Fred the Shred' Goodwin, only exists thanks to multi-billion pound support from the government, which owns 83pc of its shares.

You would imagine that owning 83pc of a bank entitles you to decide how much its chief executive should be paid but that is not the case. Ironically, it was the previous Labour government which recruited Mr Hester and which drew up his contract.

Iain Duncan Smith, the work and pensions minister, claimed yesterday that, as a result, the government would have to sack the entire board of RBS if it wanted to reverse the bonus payment deal and that, he warned, would lead to "chaos".

Many MPs, including a good few Conservatives, think that this is nonsense and they fear that the cabinet has simply been mesmerised by the powerful mystique that international bankers have tried to generate around their activities in recent years to explain how and why they should get paid so much for shuffling money around.

There is now a massive gulf between the money paid to senior executives in major companies and the relatively derisory amount that government ministers get for doing their job. Mr Cameron, for instance, is paid only €170,000 a year although, as Tony Blair has shown, there are ample opportunities for ex-prime ministers to make money once they leave Downing Street.

Mr Cameron is acutely aware of the threat to the stability of society from the escalating gap between the richest and the poorest. He frequently sounds more like a Labour than a Conservative politician in his pleas for responsible capitalism. "You need moral markets because you need people to make moral choices, you want businesses to make moral choices," he said recently.

Peter Mandelson, the key political strategist in the triumphs of Mr Blair and New Labour, warned last week: "There is growing evidence that global economic integration brings rising inequality within economies if the balance between those who benefit from globalisation and those who bear the burden of the adaptation it demands is not actively addressed."

It was Mr Mandelson who famously said that Labour was "intensely relaxed" about people becoming very rich, provided they paid their taxes. He now reckons that Labour "oversold globalisation", a remarkable confession considering his role in promoting more world trade during his time as an EU commissioner.

Ms Lagarde warned last week of the dangers of a 1930s moment, in which inaction, insularity and rigid ideology combine to cause a collapse in global demand.

Today, as Mr Cameron contemplates the frantic efforts in Brussels to avoid such a catastrophe, he does not need a ninja sensei to tell him that the politics of the aftermath will be even trickier than the economics.

Irish Independent