Bank Bonuses for Good Performances?

Well, I am back to my chief gripe these days; payments to bankers. George Osborne, Tory Shadow Chancellor, has said that handing out large pay deals to employees in any bank that is backed by state funds is unacceptable. This has provoked the British Bankers Association to retaliate by telling us that bonuses are only paid for good performances. Risk and remuneration go closely together. This seems almost unbelievable. Ms Knight, the CEO, believes, of course, in the unique value of bankers and if we do not pay them the right money, they will up and go to New York or Frankfurt. But when everybody talks about bonuses they miss the primary issue. It is the basic level of total remuneration that is wrong. If a trader is promised a guaranteed bonus of £7m, it is not a bonus, it is a basic payment. I do not care what they call these pay cheques - basic pay or bonus - it is the total that matters. And for investment bankers, the totals are far too high. The FSA says that it has no authority to regulate pay in the banks and if we want this, then it is up to politicians to introduce legislation that sets out the rules. Mr Osborne said, quite rightly, that the state handouts were meant to stabilise the banks not to reward the bankers. And reward them for what? In 2008, they wrecked the world's financial system, not with their expertise but with their incompetence.

Lord Mandelson of Here, There and Everywhere weighed in with a few comments, just to attack the Tories, but had nothing of any consequence to offer. Does he think paying bankers buckets of money is right?

In The Guardian newspaper on Thursday, John Kampfner, CEO of Index on Censorship, complained about the ridiculous payments and a new banking code which was "symptomatic of our veneration of those paid far beyond their worth." Exactly. The failure is partly due to lobbying campaigns by the bankers but also the fawning attitude of government and FSA to these partakers of obscene wealth. Mr Kampfner observes that Britons have long displayed a curious deference to people who are paid far beyond their worth - and we do not riot in the streets or physically attack the bankers Of course bankers are near the top of the list of people paid beyond their worth, but we cannot ignore GPs and dentists earning up to £300,000 per annum, lawyers at £1,000 per hour or excessively paid town clerks and heads of quangos. It is sad to have to say it, but "the Britain of New Labour has become the world leader in indulging the super-rich and the very rich." When does a very rich person become super-rich? We should be told. Aneurin Bevan, thou shouldest be living at this hour.

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