Friday 7 January 2011

What George Osborne used to say about bank bonuses

When it comes to the Government and the banks, surely the public are entitled to ask why the Government talk tough and make promises, but then fail to deliver.

As we wait to see bonus payments over the coming months, we will remember the Prime Minister's promise that the era of the big bonus is over

- George Osborne to the House of Commons, 26th November 2009.

Osborne will naturally expect his comments to be remembered now that, as Chancellor of the Exchequer, he can do something about it.

At least we can anticipate that, if he talks tough, he's sure to deliver.

Especially as we also have assurances just last month from deputy Prime Minister Nick Clegg that he won't stand idly by if banks pay out billions in bonuses, as though little or nothing had changed (though Clegg may simply have been trying to win a bet for the number of cliches one could squeeze into two sentences).

The banks should not be under any illusion, this Government cannot stand idly by.

"It is wholly untenable to have millions of people making sacrifices in their living standards, only to see the banks getting away scot-free."


Neither Osborne nor Clegg will want to break those promises.

And the BBC's Robert Peston has the latest, as ever:

The government has become reconciled to British-based banks paying out bonuses running to many billions of pounds in the forthcoming bonus round.

After weeks of talks between ministers and senior bankers, the best that ministers are hoping for from the banks is a statement from them - possibly at the end of next week - that they will pay out less than they would otherwise have done.

"They are looking for some words from us that prove that the negotiations have achieved something," said a senior banker. "I fear however that there may be more spin than substance to what we say."

Is "Government seeks spin not substance over bank bonus billions, say bankers" the headline George Osborne was looking for?

Osborne may have a good claim to the accolode.

He, rather curiously, had been trying to water down disclosure regulations he claimed were too weak.

He's introduced what he says is a pretty tough bank levy. Strange, then, that the Wall Street Journal reported under the headline UK Levy Not Taxing for banks that the bankers could "count themselves lucky" to get away so lightly, with one senior banker telling the paper that anything under £5 billion was a "rounding error".

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