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