Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn

It’s hardly a surprise, but the coalition has decided that it has done as much as it intends to tackle excessive bankers’ bonuses, even at a time when small businesses continue to suffer as banks refuse to lend. Most banks will not pay out their bonuses for 2010 until February 2011 but the Treasury minister Lord Sassoon’s declaration in the House of Lords this week indicates the government is satisfied that its ‘work’ on City bonuses is complete.

It’s hardly a surprise, but the coalition has decided that it has done as much as it intends to tackle excessive bankers’ bonuses, even at a time when small businesses continue to suffer as banks refuse to lend. Most banks will not pay out their bonuses for 2010 until February 2011 but the Treasury minister Lord Sassoon’s declaration in the House of Lords this week indicates the government is satisfied that its ‘work’ on City bonuses is complete.

Lest we forget, back in May a key Coalition promise was to “bring forward detailed proposals for robust action to tackle unacceptable bonuses in the financial services financial sector”.

Such lofty language will not be matched by actions. The Centre for Economics and Business Research think-tank has estimated that 2010 bonus payouts will amount to around £7 billion.

The u-turn took place when Lord Sassoon told peers:

“The government has taken action to tackle unacceptable bonuses in the banking sector. The Financial Services Authority is updating the remuneration code, which will ensure that bonuses are deferred and aligned with the underlying risks, and significant portions of any bonus will be paid in shares or other securities.

“Employees in this industry will no longer receive all their bonuses in cash while leaving their shareholders, and potentially the taxpayer, exposed to the long-term consequences of the risks they take.”

At the same time, the government is giving small businesses another slap in the face with the prime minister indicating the coalition will not introduce net lending targets on the banking sector.

Asked by Lord Myners, Labour’s former City Minister and a former hedge fund manager, if this meant that future bonuses would be “deemed to be acceptable”, Sassoon added:

“We have indeed taken action, including, among other things, requesting the Financial Services Authority to take certain factors into account in its consultation on the remuneration code.”

The remuneration code was established by the FSA in 2008 on the instruction of Labour at the height of the banking crisis when banks were paying out bonuses despite incurring huge losses and receiving taxpayer bailouts worth an estimated £1 trillion.

So, for all business secretary Vince Cable’s party conference talk of City ‘spivs’ and ‘gamblers’, the reality is the City policy is being dictated by George Osborne. Lord Sassoon repeated Osborne’s line in his spending review speech, trumpeting the importance of the City to the British economy.

Despite the urgent need for the banking sector to reform and make bonus payments on the basis of merit, and increase lending to energise private sector growth, the sad reality is that while the coalition remains in power it is business as usual for the City.

38 Responses to “Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn”

  1. Andrew Tindall

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  2. Pete Walmsley

    Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn //bit.ly/9rTYia >> no need when they can shaft the poor

  3. rebecca nolan

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  4. Liz K

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  5. Douglas Blast

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  6. Shamik Das

    £7bn!! RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  7. John Brissenden

    Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS (via @leftfootfwd)

  8. Katrina Gilman

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  9. 'king idiot

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  10. Ben Folley

    RT @shamikdas: £7bn!! RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  11. Hazico_Jo

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  12. Jordan Hall

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  13. Jo C

    RT @shamikdas: £7bn!! RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  14. Ollie Lawson

    RT @johnbrissenden: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS (via @leftfootfwd)

  15. Matt Jeffs

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  16. joanna corfield

    RT @trinagilman: RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  17. Melissa Nicole Harry

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  18. Martin Johnston

    well done Vince AGAIN RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  19. Anon E Mouse

    And what did Labour do apart from making them peers and NOT taxing them as the coalition has?

    Usual hypocrisy from Ben Fox…

  20. Beatrix Kiddo

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  21. GuyAitchison

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  22. Helen Thomas

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn //bit.ly/9rTYia

  23. thesocialistway

    RT @Hellsbells265: RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn //bit.ly/9rTYia

  24. Aaron Peters

    RT @shamikdas: £7bn!! RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  25. Wendy Maddox

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  26. Andy Sutherland

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn: //bit.ly/cSp8oS

  27. Tim

    Banker’s bonuses: £7 billion. Public spending cuts: £7 billion. Does anyone else think there is something very wrong happening?

  28. ben fox

    Dear Anon E Mouse,

    Can I just say that I always take great pleasure reading your abuse. Keep it coming, it always make me chuckle! If only you’d say who you were…….

    Best Regards,
    Ben

  29. Chris

    @tory press release quoting mousey

    Labour introduced the bonus tax that brought 3.5bn in as opposed to the pathetic levy which is bringing in only 2.5bn and the levy is well below the 0.15% levy that Labour and the IMF were arguing for internationally.

  30. Anon E Mouse

    Chris – Obviously you’ve now accepted that under Labour less houses were built in Britain since 1946. It’s a fact but now you’re off again.

    The Labour bonus tax was a one off (an attempted crowd pleaser by the incompetent Gordon Brown – not that anyone expected Labour to do anything than reward their big business friends) – the coalition with it’s 0.04% to 0.07% will raise far more.

    You’re wrong again Chris as per usual. Have you never heard the saying “When you’re in a hole stop digging”?

    Don’t be late for lessons young man…

    hahahahahahaha

  31. Anon E Mouse

    Dear Ben Fox,

    The feeling is mutual fella – you give me as much pleasure as watching the Two Ronnie’s – I have always had a soft spot for comic turns.

    But why does my identity have any bearing on the validity or otherwise of the comments I make unless it’s your intention to ignore my points and try a New Labour type smear on my character?

    Anyway I’m still chuckling about the fact Ed Miliband (who wrote the Labour manifesto) agrees with the government on Housing Benefit – worries me sometimes just how right I am so often and how useless that prat Andy Coulson actually is…

    Must go.

    Lots of love & kisses,

    Anon E Mouse xxx

    PS. Where’s the £50 you owe me for your “speculative” comments post where I was right and after the offer you chose to ignore me? (That hurt Ben…)

  32. Anon E Mouse

    Ben Fox – Let me quickly qualify my points that you describe as “abuse”.

    Rewarded by Gordon Brown and the Labour Party – the party of big business – all the following are in finance and banking…

    Knighthoods: James Crosby, George Mathewson, Keith Whitson, Peter Burt, Mervyn Pedelty, Phillip Hampton and John Bond.

    Life Peers: Lord Turner, Shirti Vadera, Lord Leilch, Lord Myners, Lord Acton, Lord Davies and Baroness Cohen.

    CBE’s: Helen Weir, Adrian Montague, Christopher Lendrum, Susan Rice, Michael Marks and Phillip Williamson.

    OBE’s: John White, Lindsey Tomlinson, Dennis Licence and Michael Ellis

    MBE’s: Andrew Robinson, John Brown, Paulette West and Gary Lumby.

    Quango’s: Hector Sants and Glen Moreno and many many more…

    And the tax example of 0.04% – 0.07% will raise more over the long term – it must do.

    So remind me again which part of my initial comment was abusive? How can the truth be anything but the truth…

  33. maxy

    “Osborne approved an £8.3 million pay package for the new head of Lloyds Banking Group, which is 41 per cent owned by the taxpayer” – Times (£)

  34. Chris

    @tory press release quoting mousey

    In one year the bonus tax raised 3.5bn whereas the levy will raise 2.5bn, I know the anti-psychotics confuse your simple mind but 3.5bn is greater than 2.5bn. If the coalition had kept the bonus tax, as Ed proposed, we would have got more from the banks.

    Your also forgetting that what Osborne took with one hand he gave back and more with the other by cutting corporation tax. As ever mousey all you can do is spit out incoherent anti-Labour diatribes quoting liberally from CCHQ press releases.

    “You’re wrong again Chris as per usual. Have you never heard the saying “When you’re in a hole stop digging”?”

    LOL, your still suffering from the delusion that anything and everything you dream up in your chemically imbalanced and drug addled mind is gospel, a lobotomy is your only treatment option. As I’ve said before your’ll be far happier sitting in a corner drooling and messing yourself than trying to contemplate ideas far before your intelligence.

    Life must me very boring up in Lancaster and Fleetwood for you to spend so much time trolling on the internet.

  35. Anon E Mouse

    Chris – Your second part first. By reducing Corporation Tax the idea is to stimulate the private sector – the only part of the economy that produces wealth. Why do you not know this – everyone else seems to?

    And I certainly don’t recall anyone complaining when Labour reduced Corporation Tax so your comment is typical New Labour big business hypocrisy. Here are the FACTS Chris – not your usual drivel;

    1. April 1997 Labour reduced Corporation Tax by 2%
    2. April 1999 Labour reduced Corporation Tax by 1%
    3. April 2000 Labour reduced Corporation Tax to 10% (New Companies)
    4. April 2002 Labour reduced Corporation Tax to 0% (New Companies)
    5. April 2008 Labour reduced Corporation Tax by 2%

    So why are you complaining when the government cuts Corporation Tax LESS than the last useless Labour government?

    And now to the bonus tax – (In advance we know you’re wrong Chris because there hasn’t been any “Double Dip” recession and our countries credit rating has been improved)

    The Labour Bonus Tax has given the government a tax receipt of £3.5 billion but it is a ONE OFF Chris.

    The government’s bank levy will bring in £2 billion a YEAR. So by Year 2 they have 25% more than Labour and since we know we have (effectively) a Tory government for at least 10 years that is £20 billion – bit more than the hopeless Labour government’s £3.5 billion.

    And of course we all know why. Because Labour is the party of big business. We know that from Peter Mandelson’s comments and the way the useless Gordon Brown rewarded his big buddy bankers with peerages and the like:

    Knighthoods: James Crosby, George Mathewson, Keith Whitson, Peter Burt, Mervyn Pedelty, Phillip Hampton and John Bond.

    Life Peers: Lord Turner, Shirti Vadera, Lord Leilch, Lord Myners, Lord Acton, Lord Davies and Baroness Cohen.

    CBE’s: Helen Weir, Adrian Montague, Christopher Lendrum, Susan Rice, Michael Marks and Phillip Williamson.

    OBE’s: John White, Lindsey Tomlinson, Dennis Licence and Michael Ellis

    MBE’s: Andrew Robinson, John Brown, Paulette West and Gary Lumby.

    Quango’s: Hector Sants and Glen Moreno and many many more…

    Speaks for itself Chris – no matter what you say actions speak louder than words and we can see how much Labour cares more about big business than the poor.

    We know that because they increased National Insurance during their governance, whacked the poorest by removing the 10p tax rate and were proposing a NI tax on jobs last election.

    What worries me as a supporter of strong democratic oppositions in this country is that no one from the left has asked you to just shut up and start helping Labour instead of reminding everyone how useless they were.

    To date I cannot recall a single time on this blog when you have been right about anything and yet you still swear “black is white”.

    But don’t go anywhere Chris. Between you, Joss Garman (the Ed Miliband fanboy)and Rupert Read (that name must be made up) you just make my day!

    hahahahahahahaha

  36. Chris

    @mousey the tory press officer

    You really don’t know when your beaten, I prove beyond doubt that you copied an entire paragraph from a tory party press release and yet still you come back will more bullshit and a holier than thou attitude.

    “By reducing Corporation Tax the idea is to stimulate the private sector – the only part of the economy that produces wealth. Why do you not know this – everyone else seems to?”

    Yawn, the banks don’t need stimulating, they need a big stick to force them to stop paying out huge bonuses and to start lending. Our corporation tax rate is already low enough, its below the european average, tax breaks should be targeted to parts of our economy that need help such as manufacturing.

    “So why are you complaining when the government cuts Corporation Tax LESS than the last useless Labour government?”

    Because they’re paying for the cut by increasing VAT and slashing welfare payments.

    “And now to the bonus tax – (In advance we know you’re wrong Chris because there hasn’t been any “Double Dip” recession and our countries credit rating has been improved)”

    The effects of Osborne’s sadism hasn’t been felt yet and the economy is still feeling the effects of Labour’s stimulus. But the biggest risk is not a double-dip but rather an L-shaped recovery. Also, the social impact of the coalition’s economic policies will have a devastating effect on those that need our help the most.

    Oh and our credit rating hasn’t “improved” its been AAA all the bloody time. Your spreading yet more tory lies but what more would one expect from a tory press officer.

    “The Labour Bonus Tax has given the government a tax receipt of £3.5 billion but it is a ONE OFF Chris.”

    If in government now Ed would continue the bonus tax.

    “Speaks for itself Chris – no matter what you say actions speak louder than words and we can see how much Labour cares more about big business than the poor.”

    Where did you get that list? A tory party press release no doubt.

    “What worries me as a supporter of strong democratic oppositions in this country is that no one from the left has asked you to just shut up and start helping Labour instead of reminding everyone how useless they were.”

    LOL, there is a difference between constructive criticism of where Labour went wrong and your rabid ravings that puke lie after lie into the comment box, all copy and pasted from tory party press releases.

    “To date I cannot recall a single time on this blog when you have been right about anything and yet you still swear “black is white”.”

    We’ve discussed this before, just because in your tiny anti-psychotic addled mind you believe something to be true doesn’t make it so in reality. And just one, of many, things that I’ve been right on is that you copied an entire paragraph from a tory party press release!

    “But don’t go anywhere Chris. Between you, Joss Garman (the Ed Miliband fanboy)and Rupert Read (that name must be made up) you just make my day!”

    Yawn, you must be a truly sad little individual.

  37. Anon E Mouse

    Chris – So once again, despite your smearing, lies and criticism you have completely failed to address any single point I raise with a single shred of EVIDENCE.

    In this public forum you have been shown (again) to be nothing more than a New Labour lacky…

    You do the coalition government’s job for them Chris. Reading your remarks must leave anyone who supports Labour holding their heads in their hands. Thanks Chris.

    Case closed.

  38. Bryonny G-H

    RT @leftfootfwd: Coalition gives up on tackling bankers’ bonuses as 2010 total set to hit £7bn //bit.ly/9rTYia

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