Reeling in the bankers’ bonuses

By Alex Smith / @alexsmith1982

UPDATE: A leading banking analyst describes Osborne’s plans as “populist headline grabbing”.

UPDATE: British Bankers’ Association chief executive Angela Knight, a former Tory Treasury minister, has queried the omission of investment banks, adding: “The big bonus culture is not in retail banking but investment banks.”

UPDATE: Liam Byrne has mocked Osborne for “wimping out”, saying his proposals would “actually water down the rules we’ve put in place, which are now the tightest in the world”.

This morning, George Osborne is due to give a speech to the Thomson Reuters Newsmaker at Canary Wharf, and is expected to attack banks and bankers and promise that a Conservative government would do more to reel in the culture of excessive bonuses.

He is expected to say:

“I am today calling on the Treasury and the Financial Services Authority to combine forces and stop retail banks paying out profits in significant cash bonuses. Full stop. Then the cash that would have been paid out should be put on to banks’ balance sheets explicitly to support new lending. This should be a condition of continuing to receive taxpayer guarantees and liquidity support.”

I’ll be tweeting from the speech to the widget below, but thought I’d provide a space for people to discuss the issue in the meantime.

In August, I signed a letter co-ordinated by Compass calling on the government to establish a high pay commission to look into the culture of bankers’ bonuses and excessive remuneration.

Two months on, and over a year since the crash, the government has yet to take the firm action it should to break up our banks and end the culture of excessive pay and casino capitalism that caused the financial crisis in the first instance.

Now, as the Tories are at least making moves on this issue, Labour must act, too.

As Polly Toynbee says in today’s Guardian:

“Without political expression or leadership, public outrage skitters all over the place but it settles mainly – and probably deservedly – against the government of the day, which said nothing until recently about gross excess, and even now does little. Grotesque pay at the top has fractured all pay scales, leaking out to distort public sector management.”

Follow the tweets below:

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