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Don't Worry, Bob, You'll Be Fine for Custard Creams

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Bob Diamond has given up his bonus. He has, said Marcus Agius, who resigned as chairman of Barclays nine days ago, and then reappointed himself one day later, waved away more than £20 million. But he will, he told a select committee yesterday, still walk away from the bank he said he loved with more than £2 million.

You can buy a lot of custard creams for £2 million. You can buy a lot of baby wipes, and sliced ham. You can buy a lot of toilet rolls, and a lot of fabric conditioner, and a lot of washing up liquid, and a lot of Calpol. You can, in fact, live a "decent life," according to a report from the Joseph Rowntree Foundation, even without a £20 million bonus, and even without a fair whack of the £2 million salary and benefits you'll still, if you're the former chief of Barclays, get.

If Bob Diamond is a little bit worried about how to make ends meet, he should read it. If, for example, he doesn't really want to travel on public transport, he'll learn that a second-hand hatchback will, once he's paid his tax, insurance, and MOT, cost him £59.55 a week. If he's worried about how he's going to be able to afford to go on holiday, he could find out about "self-catering caravans" at "a family resort."

He will still -- he'll learn -- be able to buy presents for his family on their birthdays, just as long as he doesn't spend more than £15 on each. He can even go out for the odd meal. He can, to be precise, go out for a meal once every four months, but if he prefers to swap those meals for a McDonald's or a KFC (which, having had one on Sunday, I couldn't really recommend) he can do it a bit more. He can still buy clothes for his children, as long as he gets them from Primark and Matalan, and he can still buy vegetables and washing up liquid, just as long as he gets them from Tesco.

And if he's worrying about entertainment, he shouldn't. He can still watch himself testify to select committees on his own 22-inch TV, and he can still watch things like Wall Street and Margin Call on DVD. He can even check the Libor rate, and see whether his mentions on Google have gone up from 41,800,000 to 41,800,001. He can do this with his own Internet connection, on his own computer.

He could, according to the report, do all of this on £36,800, if he was married with children, or on £23,900 if he was a single mother, or on £16,400 if he was single which, amazingly, he isn't. If he was single, to be honest, he probably couldn't have the car. You only need a car, according to the report, if you've got children. But Bob Diamond does have children. He has a daughter who works at Deutsche Bank and who tweets things like "George Osborne and Ed Miliband, you can go ahead and #hmd", so I think Bob Diamond can probably relax about the car.

If Bob Diamond thinks this all sounds rather modest, he should speak to the people who helped to write the report. These people, in "21 detailed focus groups" and from "a range of social backgrounds" decided to look at the things they thought people needed to have an "acceptable" standard of living, and they all agreed about the custard creams and the second-hand car. They all, in fact, came up with the same conclusions as the people who took part in similar research in 2007. They did, it's true, decide that you might have to eat out a bit less than the people who did the research in 2007, and that you might have to spend a bit less on birthday presents, but they still thought you could buy orange juice and Calpol. They still thought, in other words, that even after a financial meltdown and a global economic crisis, there were certain things that most families were right to feel they had to have.

The trouble is that the cost of having these things hasn't fallen, but incomes, if you don't work in banking, have. Since 2008, household incomes in this country have either fallen or been stuck. You need more money than you did before to make ends meet, and most people have less. An economic crisis doesn't help, but even before the economic crisis wages were going down. And they're going down even in countries where there's growth. Whatever's happening to the profits of big businesses like Barclays, they don't seem to be trickling down.

If Bob Diamond wants a new thing to worry about, he might start worrying about this. He doesn't seem too keen on politicians, but he might want to listen to one he would, in a select committee, call "Nick." This Nick (a Tory called Boles, not a Lib Dem called Clegg) said in a speech to a think-tank yesterday that "politicians of all parties have barely begun to wrestle with the implications of stagnation in living standards or confront the agonizing choices that we will be forced to make in decades to come."

And they haven't. They've talked about the "squeezed middle" and "alarm clock Britain," and the importance of cutting the deficit, and the importance of getting growth, but they haven't really talked about the fact that most people in free-market Western democracies are getting poorer. And likely, in the years to come, to get poorer still.

Cutting benefits (which are already 40 percent below the Rowntree "acceptable" standard of living for families and 60 percent below the level for single people) won't help. If orange juice and a few vegetables are what you need for an "acceptable" diet, it's not really going to help anyone, and certainly not the NHS, or the taxpayers paying for it, if you give people benefits at a level where the only things they can afford to eat make them ill and fat.

Nick Boles thinks that state spending (unlike bankers' bonuses) should be linked to "productivity". He thinks you should only spend money if it will make people more competitive, which is rather bad luck if you're too old or ill to work. He also thinks, and is right to think, that giving free TV licenses, and bus passes, and a winter fuel allowance to pensioners whose standard of living is well above the "decent" level isn't the best use of the precious taxes paid by those whose standard of living is well below.

You might not agree with his approach, but at least he's asking the questions. We all need to be asking the questions. A few custard creams and a second-hand car doesn't seem all that much for a working family to ask. If this is our biggest problem, we need our biggest brains to address it. People who understand the modern market. People, for example, who might want to think about giving more than a bonus back.