Thursday, 29 January 2009

Anger at bankers' bonuses ... at Davos

There have been one or two comments that the entertaining Dragon's Den-style final plenary session 'One Idea to Make Britain Fairer' at the Fabian conference veered too dramatically off to the left. The conference audience favoured the more radical proposals: a large increase in the state pension, and a cap on the number of privately educated pupils at Oxford and Cambridge, while I enjoyed David Lammy's spirited chairing included asking the audience if there were still any New Labour types wanting to knock down Kevin Maguire's maximum wage proposals.

While the proposals are not likely to be heading straight into an election manifesto, we are not the only ones. Indeed, there may be some danger of the left being outflanked by the Masters of the Universe, according to a fascinating Davos blog from Telegraph economics editor Edmund Conway.

As the discussion went on it became clear that for many of the delegates, “sorry” simply wasn’t enough. They wanted actual retribution, in the form of jail sentences for the executives who were responsible for the ultimate losses, and through clawbacks of bonuses awarded to the masters of the universe in the fat years.

Rather remarkably (this is the World Economic Forum - the home of billionaire capitalism, after all), comments such as these generated a large round of applause throughout the auditorium. The tide truly has turned against finance. Thus it was that, at the end of the debate, when asked for a show of hands over who would support clawbacks of bonuses, the verdict was a resounding “yes”.

That bonuses should be paid back when companies fail won majority support in our recent Fabian poll. The Davos discussion is reflecting a public mood where proposals like those made by David Coats, for a Top Pay Commission and for a tax regime which disincentivises short-term bonuses would be both effective and popular.

I was interested too to see that the Principal of Cheltenham Ladies College wrote to The Independent, responding to Ellie Levenson's column about the conference debate, to say that capping places is 'well worth consideration'.

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