´óÏó´«Ã½

Good. A bit of help to the unfortunate with a good spanking to the arrogant.
I do hope the New Deal is an environmental one. Or will Oxfam be just as concerned about that deal as they are at what is going on over in Dopenhagen just now?

We need a high windfall tax on all banker remuneration (above £100,000) not just to raise revenue, but to send a strong signal to these people that their behavior is unacceptable, and they should not continue to live handsomely while their greed and incompetence are causing such misery to ordinary people.

I will support an leader who takes a tough line with this disgusting and continued greed that is such a blight on our society and economy.

This comment was removed because the moderators found it broke the house rules. Explain.

RP, I too think any new or smash and grab taxes will be heavily dressed up as social causes, but shouldn't all the taxation we currently pay be in the public interest and worthwill anyway ?

The very thought of the government holding the banks responsible for causing the greatest theft of funds in history is certainly worth reporting. It would be better if the banks had to repopulate the diminished retirement accounts as this would give the stolen monies back to those from whom it was stolen and spur some spending in the economy. Taking money from banks and funding this program or that looks good on the news but does little in the economy. Give the people money and they will spend it, that is how economies work. Not one single economy started as a bank first. Only bankers and politicians believe that banks make the economy, oh, and economist who are consultants to both. Individual spending drives the economy and once they figure that out and do something to put money in the pockets of the people, things will improve. It is a demand and supply economy...only dead American Republicans believe in supply side economics..and economist.

On stephs comments section i posted yesterday asking for some indication of how much the govt needs to reduce spending by next year. I then quickly and in simplified form went through what reducing by £100 billion would mean for unemployment and came to the conclusion that each full time worker in the UK would go from supporting himself plus 1.5 others to himself and 3 others.
Surprisingly no one commented.
Nevertheless today I propose that instead of making millions of direct and indirect govt employees redundant we go to a 4 day week for 4 days pay for all these workers. It may seem harsh but when the alternative is millions on unemployment benefit, I know which i'd chose.

As for this bankers bonus nonsense. From 2001 on the mortgage business and associated construction and selling of MBSs of various types has been little more than organised crime. And as everyone knows, leopards don't change their spots.

Surely a case of tax and bend!

The more sensible approach is to provide growth capital for small business, and this is essentially what I proposed yesterday - see my post at #27 on Robert's 'Will Biffing the bankers biff Britain?'.

I am not sure what a New Deal for young people would consist of. Is it simply handing them money? We have far far too much of that already!! No solution there.

Is it getting them into jobs? Then the Growth Capital for businesses can do that very well - perhaps with a tax incentive to favour new younger employees (although that might be discriminatory in its own right).

Is it going to be some sort of workfare? This might work - get young people to do some socially necessary work that otherwise goes undone - removing chewing gum from pedestrian walk areas, fill potholes in the roads that the local council obviously don't have the funds to do directly, do small jobs for senior citizens who cannot afford to get them done themselves, etc.

I may be able to think up some more ideas that the government can steal.

Robert - A windfall tax, like a personal super tax on bonuses, will ruffle feathers - but how else can ALL those who will try and wring more cash out of the system be caught/stopped?

In you blog, you say :

"But the truth is that the proceeds of the fiscal spank for bankers - some few hundred million pounds - will vanish without trace in the Treasury's financing requirements for this year and next."


Well, perhaps. But thats like letting someone off a litter fine, beacause the £30 makes no real difference to the coffers, and neither did the scrap of litter, in the grand scheme of things.

Whatever a tax reclaimed, be it 10%, 1% or 0.001%, the point is its levied to show these "people" that society (if there is such a thing ) expects some fairness, some reasonable humility, and some contrition.

True enough, on paper, certain banking sectors have made a profit - so its snouts back in, as far as these departments are concerned, regardless of the fact the business as a whole is in hock up to its eyebrows. At least a tax on thise "profitable" sectors shows we are still watching....

Overall, its still a very bad joke - The board of RBS claim "market forces" when talking of their own pay rates and bonuses - OK - fair enough BUT if they had been left to market forces in the last 12 months, surely RBS/HBOS would now be closed - with NO Money for any of them other than Redundancy payments from the Insolvency Service at legal minimums.......these banks, as corporate entities, were a few hours from closing their doors - and their ATM's - and ceasing to trade.....where where the cries of "leave us to the market" then - or are their beloved market forces only relevant on the upside ??

In reply to the "value for money, are they worth it, it's the going rate", banking bonus question - the fact is there is very little one person can do that justifies a six or seven figure payment......they rely on admin staff, HR and logistics that sit below them in the banking system, none of whom get these "glamour" payments. Yet - without the infrastructure, they could not function.

They have no humility.

The bailout kept certain banks from closing - and saved others from the tsunami that would have followed - so the likes of Goldman Sachs, who currently whinge that "we got no bailout, so give us our bonus" are simply ignoring what would have happened if the market had got its way.....they were next in line.

Its a house of cards - fueled in the large part by "money from nowehere" in the form of house price inflation and company percieved value on the markets - paper shuffling exercises that are not viable in the long term - hence the "big adjustments" every now and then.

Finally, and this relates to Public sector pay as well - No One needs £250K a year.... no one - let alone a bonus of this, or more.

In reality, this country should regard any salary above £75,000 or thereabouts as exceptional. Go back a couple of decades, and the pay gap - which will always be there - was not the pay chasm it is today. GP's, Senior Teachers, Policemen, Senior Professionals (bank, law, engineering etc etc) would earn perhaps two or three times the national average. Exceptionally four. So today, with £25K being about UK median - £100,000 would be exceptional. Therefore £40 - £80K would be the natural territorry for the higher paid - but there are Council Leaders all over the country earning twice this, and yet they run deficits each year, and fail to deliver the services they are paid to provide !!!

Todays differentials- where mutliples of five or ten between shopfloor and MD - or bankteller to Director - or secretary and Salesmanager - are fairly commonplace, is simply not a long term option IF we wish to live in a civil, inclusive society.

Someone please explain to me, and then tell the Corus workers in the North East, why 1000+ City bankers - whose industry this time last year was, literally, "bankrupt" - can now be paid £1million EACH in bonuses - on top of already high six figure basics ???

Shameful they can even consider it, and worse still will be the squeels of pain when the tax bills - personal or corporate - land.

Unless that is, you're an accountant, paid to dodge/avoid/defraud your clients way out of the liability....then its payday.

Even without the pre-budget report having been announced, so much damage has already been done that today we decided to suspend any further investments in UK mid-cap companies. We can no longer invest in a country that apart from having one of the most complex tax codes in the world no also introduces a level of fiscal uncertainty that is driven by populist politics and short-term electioneering. Anyway, there is the GBP 800 mio government fund now to substitute parties like us. As Bob Diamond said so well today: the race to the bottom is on in the U.K

oh well the media's been leading me astray for years. I thought taxpayers money was 'mine'!

Of course not. It's spent money as far as i'm concerned I pay tax I do not receive it.

Taxpay-ers not tax receivers. It is after that the governments money and they do as they see fit. I get a vote once every 5 years.

That's it!

I will still pay council tax income tax vat road tax stamp duty inheritance tax and tax.

If something happens that means I pay less tax I think I might feel as though I gain somehow. If I had a job. And a qualification and student loan to pay off.

I am not a banker but, as I've said in a previous post, this whole issue sickens me. I have to speak out because I am just not seeing any fair play here whatsoever!

If you can pinpoint to me specific people and say something along the lines of "Hey, you Mr Specific Banker! Yeah you! You made this decision on such and such a date which caused this side efect which led to this issue which brought down our economy!"......

.......If you could say something like that with any reliability then yeah, sure, go ahead and strip him of whatever you can get.

But don't try and tell me that blanket taxation of a specific sector is anything more than a knee-jerk, shamelessly vote-grabbing, please-the-baying-masses, diversionary tactic being pulled by a doomed administration.

The idea of blanket punitive taxation should be repulsive to everyone. Yes, even the average just-been-made-redundant-at-Christmas-and-very-angry-about-it ex-worker.

It never fails to amaze me how people from industries that take to the picket lines at the drop of a hat have the utter gall to advocate such a thing as a blanket punitive tax.

It's disgusting. You never see the financial sector on the picket lines now do you? And if you think they have a cushty job then you need to do your homework.

People are always trying to blame someone, anyone, for their hardships. It's usually the immigrants or the rich-in-general. Now it's the high-earners in the banking sector, most of whom did NOT contribute directly to the crisis. Who will it be next? Lawyers? Plastic surgeons? Anyone who wears glasses or is educated?

The people whose heads should be on the block about this are:

a) Those who are supposed to regulate the financial industry (HA HA HA!!!)
b) Anyone directly responsible for the watering down of the regulations (politicians, bankers, whoever)
b) Those who made the decision to bail out the failing banks and subject the taxpayer to billions of pounds of dodgy liability

Take a second to imagine this. What if the regulators did indeed regulate as visciously as they were supposed to?

The majority of people in our country would never see a single penny loaned to them. Ever.

Would they be happy with this and thriftily save up to buy what they want? Pfffft!! They'd be up in arms that they couldn't get credit.

Take an additional second to imagine this as well. What if the people who make the decisions had decided to let the banks sink and protect the great taxpayer from being in the position of seeing taxpayer money go into the hands of the evil bankers?

Can you imagine the uproar that would have caused?

Mr Joe Public wanted freer credit facilities so he could get what he wanted. He wasn't complaining then now was he?

Mr Joe Public wanted the failing banks saved so he didn't lose his money.

Mr Government said, sure, whatever, anything you want as long as you don't notice that this is all our fault.

Mr Banking Industry did what industry does and attempted to make a profit. Sure, this involved dodgy practices and I'm not defending that.

But, if the regulators and politicians had been doing their jobs, then those practices would have been illegal and this would never have happened.

And now the masses want to go after dedicated emploees, who were working their a*ses off, within the ruls of their industry??

Power to the people someone said in a comment on a different thread.

Then God help us all because, clearly, the "people" have no clue.

This comment was removed because the moderators found it broke the house rules. Explain.

You know what I'm sick to the back teeth reading about bankers bonuses/windfall tax/bailouts etc etc, am I the only one who thinks this is either a)An obsession or b) a diversionary tactic, I really could not care less anymore about the fate of these institutions and people when the real economy is crying out for a bit of help, and pleeeeese don't tell me that we have to sort the banks first then it will follow as I'm way past believing that. I have run a business for the past 25 years and have burned up half my capital in the last 18 months trying desperately to make it work, and you know what....it dose'nt, and no matter what i do it makes no difference cos we're all banjaxed. After christmas I will make half of my workforce redundent, about 15 or so and the rest over the following 6-10 weeks if conditions do not improve.
I remember clearly last christmas thinking the first quarter 09 would be bad, well folks I know a lot of people in the same position as me who tried making it work this year but could not, the first quarter 10 will be carnage believe me, and Mr Preston...Business editor I believe can we not try reporting on the many many other business sectors other than banking

#6 Nevertheless today I propose that instead of making millions of direct and indirect govt employees redundant we go to a 4 day week for 4 days pay for all these workers. It may seem harsh but when the alternative is millions on unemployment benefit, I know which i'd chose.

At the weekend I think it was reported that there was surprise at the drop in income tax levels, and this was due to many businesses operating short-time hours and also a reduction in paid overtime.

With our small business we have seen that enquiries and web site visits have dropped very significantly on Fridays, (always a bit quieter than other days) but now a very noticeable difference

Ever other fininancial city in the world as high earners and ultimatly banks will move off shore and in the end NO tax revinew will be received

So comical ali is going to tax the banks' 'excessive' bonus pools!
I bet the RBS board have been fully appraised and have already thought up some accounting 'wheeze' to lose the bonuses in some other category whilst still paying them.

How about 'bad bank' pool bonus???

Will a tax on bankers raise revenue ? If you were fortunate enough to receive multi-million bonuses and a one year tax were introduced would you a) take up sailing for a year b) move to a different country or c) bend over. You already pay a lot of tax, so taking up the first two options would reduce the tax take.

Will a tax on banks raise revenue ? Well two of the biggest are majority owned by the government so the tax on these will mainly go around in a circle. Which kind of makes it unfair on the shareholders of the Banks that sorted themselves out. Why did they bother ? But yes there might be some revenue there (assuming the tax is not so high as to make the Banks relocate). Of course this will depress the funds available for the Banks to lend out. Not only that but the multiplier effect will make this much larger than the funds taken in tax. What then - print still more money ?

Will it ounish the guilty ? I guess most of the big bonuses go to the investment bankers who are basically high powered salesmen - they may be overpaid but was it their strategic direction which caused the problems ? What about the Boards who were supposed to control that strategy - well the incompetents were paid off and the talk is not about taxing ex-bankers.

Are the proposers credible ? Are they the work of democracy, probity and competence ? Was the formal prime minister elected as such ? Was the other leading figure in the party elected. Well, he was once but left in disgrace never to return. Sorry, make that twice. This time he is not even elected to parliament. What about the City Minister ? No - he wasn't even elected to parliament either. On Myners wikipedia entry it says he uses offshore schemes to avoid £100 million of tax every year. The Treasury committee criticised him for letting one of the chief banking culprits take a multi-million pension pay off, branding him naive. Meanwhile throughout the government the expenses scandal shows up so many to be criminal or greedy.

Are these proposals a smokescreen or has the plot been so completely lost the government is just careering about drunkenly flying kites and introducing hasty policy at random, prolonging our agony and their last few paycheques/expenses/pension accumulation while they build ever higher the mountain to be faced.

Move to where? New York Bankers are trying to come here!! Let the RBS board resign. The game is up. The guys at the top are a busted flush anyway.

Chipping away at unjustified mega-bonuses should not distract the government to enshrining the so-called fiduciary duty in law - the definition I would have in mind is one that ensures a sustainable business in the long term for shareholders, employees and customers. This law would have said "go to jail and don't receive £200" to many of those screaming for their million quid.

Now that we have one section of the economy identified as pariahs , might we expect to see more sections 'outed' as undesirables in this puritanical reformation ? Never really believed that footballers should be paid millions and Elton John should be heavily penalised for making millions just singing and when we get to politicians and journalists and quango managers and local authority chiefs on 6 figure salaries,etc,etc.Well done Nu Labour,you have succeeded in setting various groups off against each other,what next street demonstrations of hatred ?

How about a 20 % paycut for public sector workers on average but tapered so that it only kicks in above 25k.

Is that statistically possible?

Confiscation is the only game in town - them today, you tomorrow.

So it goes.

Gordo looks to have aged a great deal - maybe it is the scream of Iraqi children in the night.

Bankers make a big profit, easy, they are using my and your savings and paying next to no interest. I could be a successful banker on those terms. Sorry Chancellor but the windfall belongs to the savers first and if the bankers want their salary let alone a bonus they should try doing their job right and providing success for all their customers, savers as well as borrowers. This is another tax on savers, if we all withdraw our money for a month we can then see how the Bankers, Brown and Darling will collect.

@watriler no 20:

100% exactly! Finally, something sensible!!

Instead of wasting time pontificating and cow-towing to the screaming general public who just want to lash out at the nearest target, the government should be taking steps to make sure this never happens again!

They are just wasting time vote-grabbing as usual!

And I'll bet my sub-prime mortgaged house that any measures they do come up with will be watered down and woefully inadequate.

It's the same story as the expenses scandal. Lax rules, no regulation, serious trouble and then no serious attempt made to clean it up.

I've said it before I'll say it again. The bankers will leave our shores in any event, even if they do not our power is dimished by our signing of the Lisbon treaty.

Just as heavy Industry then technology manufacturing after it, the financial jobs will move on (to the far east probably).

Our days at the top table are very much numbered, not even 18% Interest rates from Cameron and his BULLIEs will dig us out of this one...

Spare a thought for us poor bankers, sir.
The problem about being the fair weather friend of a fair weather friend like Gordon Brown is that when the wind changes direction or the Mail dictates, so the government policy shifts.
There are floating voters and then there are

Typical of this weak and feeble government. A windfall tax simply legitimizes and entrenches the bankers bonuses at a time when they, the government, with a mandate to run the country in the interests of the many, should be doing everything in their power to outlaw this obscene bonus culture which unjustly benefits so few. In a couple of years the tax will be quietly forgotten about and the bankers will be back to their old insidious ways.

Non Dom Rules
50% Tax
Super Tax
Contantly changing and hostile tax landscape
European interference

This is very bad for the City and the UK. Those who think otherwise have no knowledge of it operates. Switzerland is the big winner. Full Stop.

For those of you that are blindly trashing bankers - i feel sorry for you. You cant see that this is a desperate political move to help a dying regime and will ultimately cost us ALL dearly.

i'm amazed how short sighted most of these comments are. the UK is destroying the only industry that generates enough money to help pay down the deficit.

look at the US, Switz, etc - their govts are making money on selling the stakes in the bailed out banks and recovering the money tax payers put in. the UK is still deeply in the red because it is busy ensuring the shares of RBS and HBOS never fully recover and because the clowns who run this country are driving high income tax paying nationals and businesses out of the UK.

there's no question banks need to be reformed but not this knee-jerk populism. this tax will raise millions, the damage will cost billions. nice trade. this is up there with brown selling the UK's gold reserves at rock bottom prices.

i'm sure you'll all feel great for 3 months about 'biffing the bankers' but when another 100,000 people lose their jobs and services are cut because the tax base in the UK has imploded how clever are you lot going to be feeling?

comment #10 is one of the few sensible ones on this board. most of the rest are going to have 10 fun years wondering why the tax base imploded and govt spending had to be cut. i hope it's worth it. you children won't thank you.

#26 quite!

The chinese have a vast population and a relatively small number on decent wages. Thus, they have a perfect economy capitalist, plenty of cheap labour, lots of natural resources (ok the coal is dirty, but hey who cares, its a dictatorship). Why on earth should they let the UK in particular and the US to a lesser extent cream off vast amounts of dosh to raise funds and equity by a bunch of not too clever double-glazing salesmen and inveterate gamblers. They already HAVE the cash, but its currently invested in dollars.

What if the Chinese get smart and decide to swap their dollars for US and UK businesses (ok what's left of UK businesses)?

I do believe we have discovered perpetual motion:- money is shovelled in at the top of the banks then some of it gets taken out again.

Wonderful!

#29 fred goodwin

Is that you now posting from the Costa?

#26. if the chinese swap their dollar bonds for anything, yields will blow out and then the global economy is truly toast. the entire recovery is predicated on a low cost of borrowing thanks to low rates, QE and - of course - chinese buying US govt bonds, keeping down yields. look at how greece has started falling off a cliff now that its bond yields are blowing out... a picture of things to come?

sorry meant #31...

Universities will be the recipients of the tax. Those young people that have tried to avoid the contradictions of the real world by burying their heads in study need to be rewarded in their endeavours. They need to be encouraged to stand idly by whilst a maelstrom of change roars past.
Eventually they will need to leave university of course.
Or will they?
Will the new economy essentially be universities?
Look around you. University this, university that.
Universities are after the younger crowd too. They will soon be running schools.
Next they will be running old folks homes.

Will they ever run banks though?
Or supermarkets?

No but this country needs supines.

Quiet on here, where are all the usual suspects - perhaps in Denmark - confirms my suspicions of the political establishment.

I am still not going to cut of my nose to spight my face - how ever much it galls me we cannot afford to loose the "experts" (Know the system/markets,have contacts/credibility) to make profits (hopefully not from UK) that will put value back in the banks we basically own so in the next X years (50 to 1 10 years+) we the tax payers get a return.

In the acres of vitriol I have read re banks (I am not a banker) nowhere once have I seen any comment re invisble earnings/trade balance and the implications that they earn significant amounts of profit abroad - hence recent debarcle re City and EEC controls (read France & Germany seeing an opportunity).

Supertax will almost certainley be counter productive other than in political terms.

#34 mmmmm!

Another thought. Chinese decide to set up a new world market of their own. Payment in selected currencies (or gold) perhaps, don't even need to involve the dollar or sterling. They have the power to do this and don't need the investment bankers as they have lots of dollars already. They then say (in a chinese accent), "you want to import our goods, you use our new world trading system", who is going to be able to refuse?

Think its bye bye London, hello beijing!

So Brown ends as he starts - something to try and deal with the youth unemployment problem. Very Good. Shame about the bit inbetween. Problem is the youth unemployment needs more than one mexican wave now and then. It is a very big problem. And we will all pay if it is not sorted.

#38. agreed.

the basic problem is the US gets all its money from china and all its oil from russia - the UK is largely a derivative of the US economy. the day those guys decide they don't want to play with our rules is when it's game over. 'Ni hao' beijing indeed!

Why is it that a politician who has a history degree is qualified to run this country and its economy. How about a call for politicians who wish to take top offices to be adjudged competent and have appropriate qualifications. Being a political toady, not being particularly bright (except in comparison to some of blair's babes), not having any financial qualifications, possessing zero leadership skills and generally being 100% wrong when he stops dithering are hardly the sort of qualities this country needs in its PM.

This is all highlighting the government's own failures... The tax on the bankers (the good news for the people) will be followed by spending cuts (the bad). Labour need this populist tax to go through otherwise they won't have a chance to be in government in 6 months. It sounds a bit crazy in my opinion - it's a bit like Germany deciding to overtax its car makers for having revenue boost out of car buying incentives this year (it would never happen). I'm sure they'll be paying the going rate & bonus for that industry.

It's the beginning of the end for Labour!

Robert - looks like you're gonna have a full day reporting tomorrow. apparently there'll be two more taxes on the City:


you might want to get some archive footage of jubilant crowds in Zurich ready, if the ´óÏó´«Ã½ doesn't have somebody based there...

This comment was removed because the moderators found it broke the house rules. Explain.

So, let's get this right.

Banks and bankers make super profits on the one way gravy train known as QE.

Government now plans to levy windfall tax on same said super profits, in effect taking its own money back to spend on youth unemployment.

Anyone think it would have been more efficient to cut out the middleman?

I am still waiting for the Government to force new graduates to do around forty four years VSO. That would surely get Broon the plaudits he needs from Sir Bob and make the unemployment statistics look better!

I am sure it makes people feel better to savage bankers verbally and to wish for punitive taxes to be imposed upon them. Sadly this will do little to restore our economy to growth or facilitate the recovery of public money expended to shore up RBS, HBOS and Northern Rock. These bankers are completely mobile and will simply relocate to whatever financial centre (Geneva etc) that will not penalise them financially and insult them and thereby damage the preeminence of London as a global financial centre. No doubt there will be a spiteful knee-jerk chorus of "good riddance" from the financially unsophisticated. The reality however, is that service industries like banking are vital to our recovery and cannot be replaced by wishful thinking about rebalancing the economy towards manufacturing etc.

#43 Just read the article. I am particularly impressed by the insurance tax idea. If a bank is too big to fail, how much insurance would need to be paid to cover the risk?

May I suggest this would be deemed a completely uninsurable risk by the insurance market and thus I suspect the Government will simply pocket this tax, spend it on its supporters and have no money again when a "too big to fail" bank goes bust.

Ah but comical Ali and Gordoom won't be around when the Brown stuff hits the fan. I bet Viv Nicholson would be drooling over a chance to work with these two clowns.

Just back from a prolonged fct finding mission to the beaches of S.E. Asia. They seem to have a credit crunch over there too, despite what we are led to believe here. Problem seems to be that we are no longer buying enough tat and this has led to lots of ships cluttering up Singapore harbour and environs.

Good to see Robert is back unchanged and still flying kites for HMG.

I may have missed something so apologies if this is a dumb question or has already been covered. I have been relying on poor news coverage from ´óÏó´«Ã½ World TV which packs news into 10 second sound bites in between exhortations to Go Goa.

Exactly (possibly some investigative journalism required here Robert) how much money is being offered as bonuses? And, exactly what would the tax take on it be without a windfall addon?

45. At 10:15pm on 08 Dec 2009, GeoffK1874 wrote:
Anyone think it would have been more efficient to cut out the middleman?

Yes, I do. That was a very good post.

You should join the UPF.

8. At 9:01pm on 08 Dec 2009, jauntycyclist wrote:

..how he would cut the national debt ..

there it is. i said they would call it that rather than the more accurate bankers debt [it is the larger part of it].

Iraq

-we broke it but we didn't own it and we didn't fix it and most of those those who did have moved on elsewhere.

What would Truckers week say about emily?

one of the most accurate descriptions of the ladies on NN was given by alexei sale in one of his books. you know the one.

45. At 10:15pm on 08 Dec 2009, GeoffK1874

I would like to introduce to the United Peoples Front hereinafter referred to as the UPF.

The business of the UPF is for like minded souls to raise up their voices against the oppression and financial tyranny currently being perpetrated upon the citizens of this country.

The necessary credentials to joining the UPF, are:
Firstly you must be a person, and secondly you must have a pulse.

If you are a person but do not have a pulse, you can in fact be an honorary member, but sadly you will not have voting rights.

Nevertheless, if being a person, but having no pulse you have access to a mains electrical supply and/or a live unearthed device you can still vote, providing that you are in direct contact with same at the point of voting.

I urge you to join this worthy cause and lift the membership total beyond three, which is where it stands at the moment.

This comment was removed because the moderators found it broke the house rules. Explain.

The banks are bankrupt; saved by the government to protect the majority.

There is no point perpetuating the fallacy that they are bonafide responsible institutions capable of managing themselves. They are not. They exist at the pleasure of the state, only.

The financial community, of institutions and regulators, have demonstrated they are incapable of managing risk and acting as responsible custodians of the public's meagre finances.

Let us have an exodus of bankers. Good riddance to good rubbish.

And, in the mean-time, take your money out. Stuff them.

Taxing banks or indeed backers will not work as they will always find a way to circumvent the regulations without breaking the law.

However, the government can guarantee that banks behave by passing laws which control their activities.

For example on mortgages the government could limit the maximum amount loaned to say three times the applicant's base salary which by law the bank must verify with his/her employer.

Next they could specify maximum interest rate limits for loans like they do in the USA and in some European countries like France.

By passing a raft of "limiting" legislations to control aspects of bank life, bankers will not get their high bonuses because it will be impossible to earn them.

By passing carefully drafted legislation banks will come back under government control as the only way to circumvent the legislation will be to break the law.

For that eventuality, the government simply sets up massive £1 million fines to be paid personally by the officers of the company, senior management, board members etc. and if that is not sufficient it can be topped up by long jail sentences.

It's just a pity that banks can't be more responsible without the need to do this.

I have been watching the news in amazement with bank CEO and associations defending the need for large bank bonuses. I believe that the vast majority of the British public are angry at bankers for their lack of morals. All bankers are tainted by what has happened and their greed over the last 10 years. These CEO's and Associations should be leading the change of culture in the banking industry and start teaching their employees and members that bonus's in the past have been excessive and need to be brought back to reality. The threat that we will lose the elite of best bankers from the City is pathetic. If these bankers do decide to move overseas then great, we can start to change the greed culture in the banking industry and we should revoke the british citizenship for those bankers who do decide to turn their back on their country as they obviously have no interest in putting the Great back into Britain; good riddance to those who do leave. Alan

This is idiotic. I thought RP blogged two days ago that Ally D had realised taxing the banks, not the bankers, made no sense. Now he seems to have reverted back to taxing the banks. I suspect Ally D realised taxing individuals via PAYE when they received neither cash nor "vested" shares, would actually raise no money. In fact, by encouraging banks to do EXACTLY what they have been told to do (pay in shares and defer), it would actually result in less tax being collected than if bonuses were paid in cash immediately. Ally D's shift is, therefore, everything to do with getting cash into the Treasury now as opposed to some mock outrage at the level of bonuses in financial services.

The latest leaked approach sends out a very bad message to anyone thinking of locating a business headquarters, any business headquarters, in UK. The clear message is that whenever populist sentiment is against that industry, Ally D & Co will provide the necessary populist guff to appease the masses, irrespective of the long term damage to the economy.

I will have a small wager that most of the banks (ex-RBS and maybe Lloyds) with significant international operations currently headquartered, or with their EMEA headquarters, in UK, will reorganise so that their non-UK business is no longer consolidated into their UK financials. I'll even put up Ireland as the place they will go to. Why am I so sure? Because Ireland has already seen several UK quoted companies shift their corporate HQs there over the last two years ago for tax reasons (eg Shire, a FTSE250 drugs company; Charter, a FTSE250 engineering company; WPP, a FTSE100 marketing company; Henderson, a FTSE250 fund management company etc).

Shifting their HQ, and paying bonuses out from this top level (with staff having a contract with this non-UK company to facilitate this), will take it outside the scope of UK taxation. The HQ holding company will not, itself, conduct any regulated financial services business and so will not be caught by any Irish restrictions on pay either. Ireland has specifically crafted its tax code, and operational practices thereof, to make location of HQs in Ireland attractive. Why else do companies such as Microsoft, Google, eBay etc have their European HQs in Ireland, and Vodafone has threatened to make the move too?

There is already a "bonus code" agreed to by the international banks, governments and regulators in G20. That provides a level playing field and makes the kind of arbitrage described above pointless. However, if Ally D has decided to make the UK a "bonus free zone" when nobody else is doing so, then business will quickly move overseas. It requires very few actual people moves to effect. For instance, Henderson (one of the movers noted above) have five people working in their Irish HQ. Financial businesses are very easy to re-domicile. Just look at the number of Hedge Fund managers that have set up or announced Swiss operations to escape high UK tax and proposed EU regulation.

I can appreciate the nearly everyone wants to bash the 'bankers'. I can totally understand that it seems only fair that those who cause a problem pay for it. Also it seems fair that those who can afford it pay for it....but I think we're trying to bash the bankers a little too much


Lets be clear here, most people who work for banks are completely innocent of any involvement in causing any of the current issues. In fact a large element of those on for the larger bonuses weren't involved. Should we penalise these people for the failings of their peers - after all those working in areas generating profit will actually help ailing banks back to health.

Also bear in mind that of the failures/issues in the UK Banking System, a good chunk of it (BB/NR & a good chunk of HBOS) would have happened even if RBS/HBOS hadn't had their issues. The international wholesale funding drying up saw to that.
(I accept that we could have really toughly regulated UK banks on credit to stop them getting into the mess, but thats another story)




I also want to tackle the 'bonus' issue itself. A number of people claim that bonuses themselves are bad in their very nature (the old argument about being paid a salary to do a job, I don't get a bonus etc etc).

- in many ways you can see a bonus as an extension of commission. You use it to reward the better performers. Anyone who gives the rubbish about the better ones being promoted, or the others let go clearly have no idea of the limited means to promote people in big companies, or the legislation (red tape) that prevents me from firing poorer performers. Either way, without a bonus there are more limited means to incentivise people.

- I do agree though that paying in cash is a very bad idea. For once I'll give a view and say cash bonuses should be limited in the financial sector to say £50K. The rest in shares.



The final bit I'm going to rant on about is the level of taxation. I do feel that anything above 50% tax (of total income) is a little oppressive. Any that's before any indirect tax contribution

However, what I'd say is that regardless of whether you think UK Bankers seem to have caused the end of the world, you can't just target one section of the community. Thats just immoral and revenge minded

If we think bonuses or excessive earnings are 'bad' per se, we need to tackle them everywhere. Perhaps we should target footballers, celebs, former Prime Ministers, anyone who is doing slightly better than Mr Average.

The UK needs to reduce its spending, and grow rapidly in order to cut is deficit. It not going to do this by taxing away peoples incentives, by encouraging people to leave (regardless of whether you despise them!) or by creating so much tax bureaucracy that the only growth is in accountancy.

well, that my view anyway.

So let me see if I've got this right ...

The banks start to fail because of bad investments driven to make profits super fast.

The taxpayer's money is used to bail them out.

They decide to pay "performance bonuses" - obviously, performing badly is worth a fortune these days.

Those bonuses are paid for (in part) using the taxpayer money used to prop up the banks that are failing as a result of the bad investments these people are being rewarded for making.

The government decides it will tax the people receiving those bonuses.

Last time I checked, didn't something like this whole shell-game get referred to as a ponzi scheme?

I mean, government paid the banks, the banks paid the mopes that lost them the money, the government takes the money away from the mopes and uses it to finance someone's pet project the government doesn't have time to implement before it's kicked out of office on it's behind ...

If Darling had any guts he'd have told the board at RBS to go ahead and quit en masse because they should have when they *lost* the money in the first place.

Or would that dent donations too much now MPs don't have expenses to fiddle?

It's easy to spit bile at the bankers, those nasty rich people who should be taxed until they've got nothing left.

Only what happens when the definition of "the rich" becomes looser and looser until YOU get included in it? Most of us are rich by comparison to someone else.

Let us not forget the income tax was introduced under the guise of only affecting "the very rich". But now "the very rich" don't pay it, the average working person does.

"... and then they came for me, and there was nobody left to speak out for me ..."

Remember we scared away the non-doms....a little birdy told me they're now all welcome again and have been much missed.They might not pay income tax but they do pay stamp duty and VAT and keep the taxis and restaurants busy.
And there are major doubts surfacing about bringing back the higher VAT and ending car scrappage.
Also it is now time to adopt a less literal and less implementary approach to Euro legislation and income generation for Euroland, but to spend as much Eurogrant cash as possible...and to adopt a more superficially compliant largely-ignoring-it approach....ie we have to become a bit more Irish!
I also think that the politicians in Copenhagen have no real appetite for handing valuable cash over to corrupt moneygrabbers .The joy that was climate change is a bit like everybody going to Mass and hardly anybody believing a word of it.
Word is climate change is now a dead duck , as it well and truly deserves to be, as it was so worthily but mortally boring.
And meanwhile there's lots of cash to be made shorting the Euro!

It is astonishing that it has taken all this time and now we finally find out the truth about the lending by RBS and others. And as Robert says it is poor management of day to day business that is the issue, disguised as a one-way bet on the market movement.

My question is: how much have RBS senior staff been paid in bonuses up to now in relation to these dodgy deals? And why are they not repaying such bonuses, paid after all on false profits, before being paid any further bonuses?

There it is,
it has actually happened!
We are finally getting there......


Land Ahoy!

#31, #34, #38

The Chinese economy is based on us and the US buying their cheaply manufactured stuff, as we have no money they have to lend us the cash to buy the stuff in the first place.
If they stop lending we stop buying, oh no! the credit crunch, have you not noticed the distinct lack of shops on the high st lately.

Chinese stuff is just not being stocked (presumably that monster container ship full of stuff we all heard about two years ago is now tied up along with 15% of the worlds fleet outside Singapore harbour).

Their great new plan is to create a domestic consumer market, only once the new consumers have spent their savings and maxed out their new fangled credit cards what then ?

The Russians need around $45 dollars per barrel of oil to keep their economy afloat, if demand falls so does the price.

Treading water is the new 'economic growth' in the western model, all we can look forward to is the 'Japanese experience', occasional QE to bring us back to the surface for a quick breather and then back down again.

As each economy stumbles it drags everybody else down a little bit more, we all take turns to stumble a bit and eventually we all fall down (atishoo!)

Everybody stop whining, of course bankers need bonuses....they are only in it for the money,that is what banking is all about.
Have a windfall tax, but make it a tiny one, otherwise the poor old customers will have to pay for this tax.
What I wonder is , the source of the profits comes from us mugs, the customers,and the reason the margins are so high now (interest for savers 0.5% vs interst for mortgagees averaging 4%) is that there is no competition.....we have let all the little bulding societies and smaller banks get swallowed up.....we need more banks not less, and to get more banks in the UK we need to tax them less! It is now time for the government to announce a controlled phasic divestment of its share in the bank, and just watch those shares rocket.
There is even the possibility of a "denationalisation" of the 84% share owned by the government of RBS,SOME TO THE THE MARKET, AND SOME TO EVERYONE OF US, creating a windfall for every single voter in Britain.
A bit like BT, but better as everyone could be given a couple of hundred quid's worth of shares.
We need more customer power, more websites for customers, run by non-profit-making orgs, and lower charges.
We need more competition among investment banks as clearly the margins there are too high as well.
Since 2007,life has got very dreary .
Millions of us would love the chance to remortgage and build a loft and a conservatory and buy anew car, and get a new flat.
It wasn't all bad the boom,it was not all phoney, a lot of very good things happened too.... can we have it back please,as I'm fed up listening to hairshirts complaining about everything.
When ordinary people get bored of recession, the wind changes.....and it has changed.
Just wait and see.
It is really not such a foregone conclusion that Gordon is dead meat.

I have followed these blogs with interest. Having just seen ethical and banks in the same sentence I realise it was to no avail.

Morning Robert,
what happened to the first £37 billion that the banks were given in 2008 by the Treasury? What did the banks do with the money?
It's coming up to Christmas again, perhaps the banks will need some more money from the Treasury...surely not!

Onward-Ho for chancellor ?

@onward-ho:

"There is even the possibility of a "denationalisation" of the 84% share owned by the government of RBS,SOME TO THE THE MARKET, AND SOME TO EVERYONE OF US, creating a windfall for every single voter in Britain."

I believe they called that "bread and circuses" back in the day.

I've got no objection to people being paid bonuses - when they actually do the job properly. I've never seen the point of paying bonuses for astounding levels of fail however.

YMMV of course.

"Deferred Success" is *not* reality.

36, '... a picture of things to come?'

We don't want to go there, how much energy & food do we produce here in the UK? Enough to get by? My gut feeling is nowhere near enough.

The nudeal will no doubt provide the MPerrors with the latest transparent fashion axessorayes so their bawls can once again be flashed accross the nations mediaaah to kee the boys hooting with laughter.

How is it that most of the Govt and media comments relating to Bank Bonus indicate that it was the Banks that got us into this mess?
Was it not the years of profigate budgets by Brown,the lax financial controls ,and the Govt urging banks to lend (although they did not need any encouragement) that got us into this mess.
As usual Brown blames everyone else for his folly.

Imposing a super-tax on banks that pay bonuses is completely counter-productive. Bankers are naturally greedy and self-seeking individuals as we have seen from their past behaviour. Taxing the banks rather than preventing them from paying these bonuses will only succeed in weakening the balance sheets of the banks, because in addition to paying the billions of pounds in bonuses they will be paying billions in tax on these bonuses. This achieves absolutely nothing. It is the equivalent of the Chancellor saying that he wants the banks to strengthen their balance sheets by not paying these bonuses, but if you do pay them and therefore weaken the balance sheet, we the Government, will weaken it further. What absolute stupitity!!!

@magnabritishb:

"Bankers are naturally greedy and self-seeking individuals as we have seen from their past behaviour."

Now there's a discriminatory comment is ever I read one!

Greedy? Self-seeking?

Really? What, every single one of them?

Maybe, just maybe, the fact is that they are just like the rest of us.

I.e. they work, damn hard, to earn money to secure the future of their families.

Not air. Not praise. Not a lovely warm feeling deep inside.

Why is the persuit of a lucrative career "greedy"??

There are people who aren't "greedy" and "self-seeking".

But the large majority of people in general don't fall into that category.

What is your career that you feel you are qualified to label an ENTIRE SECTOR of workers with such contempt???

@David Hartley:

Indeed. And the only thing more disgusting than the fact that Gordon Brown is blaming everyone else.....

....is the fact that the majority of people are letting him and, even worse, SUPPORTING his blanket, punitive, doesn't-matter-if-you-were-actually-at-fault-or-if-the-tax-payer-even-owns-your-bank tax.

He must laugh himself to sleep every night.