Yesterday’s Newsnight was predictably devoted to the Pre-Budget Report – or Autumn Statement, as I sometimes inaccurately refer to it – wherein Paul Mason reported that he had spoken to some bankers in the City of London and they were livid about the announced plan to tax any discretionary bonus of theirs worth over £25,000 to the tune of 50%; some, apparently, were even considering legal action. Could you be bothered? I’d have thought that their time would be better spent picking over the cornucopia of avoidance measures that will be springing up and agonising over which one to plump for. I’m similarly puzzled at the angry claim that this will hurt our competitiveness and drive bankers abroad; not by the claim, just by the anger. Why get yourself worked up, huffing and puffing about the injustices of the world, if you can simply hop on a flight to a more friendly environ?
The thing is that, unless you are a bingo-playing pensioner who receives child benefit, there is something for everyone to grouse about from the PBR, and the bankers shouldn’t think themselves anything special. As a public sector worker I’m hardly overjoyed about the forthcoming 1% cap on pay, or the reduction in employer’s pensions contributions; but you know what? Despite the fact that my area of government can hardly be blamed for the more-than-doubling of the national debt that we are going to see, we are where we are and we all need to do our bit to get that debt down, eventually. Others have suffered far worse in this recession. “We’re all in this together,” as someone once said.
The banking sector, I would humbly suggest, bears a somewhat larger responsibility for that ballooning national debt, whether you agree that it was the cause of the crisis, or merely the meek recipient of astonishing sums of public money to prop up its ailing industry, or a bit of both. They have more of an obligation to do their bit, you could argue? And yet what are those City bankers supposed to be moaning about? Will their pay rises be capped at 1%? I doubt it. Have their pension plans just been thrown into doubt? Shouldn’t have. No, they’re apparently complaining that if their bonus – and it is just a bonus, mind, not their salary; and not even their contractual bonus, but rather any discretionary bonus they may receive on top – is greater than the median annual wage in the UK, then their employers will have to stump up a bit more tax. Well my heart bleeds.
Now, I’ve a pretty easy-come-easy-go attitude towards bonuses myself; perhaps it’s because I’ve never come to expect one, the most I ever received amounted to a little more than a couple of a hundred quid, and even then I never felt I especially deserved it. I guess I could see things differently if I relied on my bonus to enable be to buy a Maserati outright, with a discount for cash. But as it is I actually feel somewhat ambivalent on the whole subject of City bonuses. Others, however, are more forthright, and make what do seem to me to be valid criticisms; Chris states that City bonuses are a form of legal extortion, while Duncan claims that in fact the performance of RBS bankers, for example, has in fact been far from stellar. Me, I guess that if bonuses are a problem – and being manifestly unfair may not the same thing as being a problem – then regulation is a better way to deal with them than to impose a quirky, one-off novelty tax to coincide with an impending General Election, and which can probably be easily flirted in any case. In the meantime, though, my searing analysis of the situation is that if that “talent” in the City really is up in arms about something as ephemeral as their bonuses being taxed while others have lost jobs, had their hours reduced or received pay cuts, then those brightest-of-the-bright must be a bunch of utter twonks.