So the annual feeding frenzy is starting. While the rest of us face the trauma of how to pay Christmas credit card bills, the City’s high-rollers shove their snouts in the trough and hoover up mind-boggling bonuses of £7billion. Government pleas to stop the gravy train have fallen on deaf ears.
Sunday, 9 January 2011
Bankers Bonus Day - now that should be a holiday!
Let’s face it, we’re envious of those bonus-wielding bankers. That’s it – the whole story. There is no great economic issue, no nascent destruction to be visited upon us as a result.
No, we’re just envious:
And not only has the media got itself into a state of excitement but politicians have been quick to capture this envy with talk of “social responsibility” and other such tommy rot. Some, such as the boss of the Charity chief executive’s trade union, call for a special extra tax on these bad bankers to be handed over to the ‘third sector’ where of course it will be spent so much more effectively!
So, instead of getting ourselves in a lather about the paying of bonuses to bankers, let’s get a little perspective. Not about whether or not the payments are earned, justified, evil or corrupt but about whether it actually matters. Can we ask ourselves why we have such a problem with people receiving bonus payments in accordance with their contracts of employment? To the extent that we want to punish them for their good fortune by either banning the bonuses or slapping on an extra tax?
Personally, I think big bonuses for bankers are just fine.
In the same way I think what premiership footballers earn is great and the scary money earned by leading luvvies is just brilliant. I’m not even that fussed about people running £1bn plus public organisations being paid “more than the Prime Minister”. Nope, if banks want to remunerate their top employees this way, that’s fine by me – and entirely the banks’ business.
And I don’t think that these arrangement merit any further investigation, any greater transparency or some form of passive-aggressive quid pro quo from the Government – "it’s OK folks we won’t have a go at your bonuses if you let us lecture you about your operational practices". The Government – an organisation with a truly awful record in business management – seeks to direct banking decisions because there’s a big stick to beat the bankers with in the form of endless attacks on the normal remuneration practices of banks. This doesn't instill me with much confidence.
So British banks will pay out £7bn in bonuses to their employees. Bear in mind that half of this - £3.5bn – will go straight back to the Government in the form of taxes. And that doesn’t include the contribution from the bewildering panoply of duties and levies that these wealthy bankers will pay on their leisure and pleasure! And remember that these bankers will spend the money, invest the money, and make rational decisions that will help build our economy.
I’m not envious of bankers (well maybe a little) and think we should celebrate their good fortune rather than trying to argue that not receiving what you’re earned is in any way ‘socially responsible’. The day bankers get their bonuses is a great day for our economy – a day when money leaves the business balance and starts being consumed, starts driving our great economy.
Perhaps that day should be a bank holiday – I’d party with the bankers for sure!