PR disaster as Lib Dem peer Lord Oakeshott sandbags UK government bankers bonus deal

The UK coalition government, comprised of Tories led by David Cameron and chancellor George Osborne with a tail of increasingly reluctant Liberal Democrats, has been completely sandbagged today by Lib Dem peer Lord Oakeshott (hardly a household name) resigning over what he sees as a government sell-out in agreeing a bonus and lending deal with the UK’s bankers.

His Lordship’s observations are currently dominating the evening’s headlines despite the fact that nobody knows who he is, he’s not a member of the Government and the aforementioned government (although it pains me to say it) has actually done quite a good deal with the hated bankers.

They’ve been clobbered with an £800m surprise tax hit, they’ve agreed to lend another £15bn to small businesses (£190bn in total) and also agreed to take their (lower) bonuses mainly in shares.

It didn’t help the notion of coalition that Harry Potter lookalike Danny Alexander, Lib Dem chief secretary to the Treasury and therefore Osborne’s number two, was fielded to reply to the mysterious Oakeshott and the best he could do was to maintain that Oaky had resigned by “mutual consent” when Oaky had just called them all a bunch of Jeremy Hunts.

This is a failure to communicate of mega-dimensions. Craig Oliver, the BBC producer who’s just agreed to take over Andy Coulson’s old job as government director of communications, must need his head examining.

Will the coalition government ever work? It may do in economic terms but in political terms it’s bust, holed beneath the water line by the Lib Dems’ completely unnecessary capitulation over student tuition fees.

That the nation’s news media are all taking about Lord Oakeshott simply proves the point.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.