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Banks bonuses: slim chance of deal with ministers

Robert Peston | 10:24 UK time, Monday, 20 December 2010

The idea that we should be reading the last rites for the City and the UK's financial services industry, because of new constraints on how and what top bankers are paid, doesn't seem quite right in the context of the announcement today by JP Morgan of substantial new investments in London.

25 Bank Street

 

This leading investment and commercial bank, one of the top two or three in the world on some measures which employs 11,000 in London, is purchasing the not-so-old former Lehman HQ at 25 Bank Street as its new European investment banking HQ. Resonant or what?

It is also purchasing another building which it already occupies, at 60 Victoria Embankment, and it will continue to work with Canary Wharf on developing Riverside South.

In symbolic terms, given that all the talk recently has been of bankers flocking to Switzerland or Singapore - to escape the UK's 50p income tax rate and constant sniping from politicians and media about bonuses - this is quite a big deal (although some will argue that the lack of a firm commitment to the ambitious Riverside South development shows there has been some scaling back in Morgan's British ambitions).

And as luck would have it, the disclosure comes on the day that the bosses of the UK's biggest banks troop in to see the Chancellor, to discuss what commitments they can make to increase their lending to small businesses and decrease their bonus payouts to bankers.

What is clear is that the plucky efforts by John Varley, chief executive of Barclays, in talks primarily with the Cabinet Office minister Oliver Letwin, to establish some kind of entente cordiale between bankers and ministers are close to collapse (see my assorted notes on all this from November 14 onwards). A source told me that "all hope of a deal is hanging by a thread".

The mood of bank bosses about all this is one of despondency, and a number of them now think a deal with the coalition is impossible.

This is how the source put it: "special advisers have fessed up that a spat with banks removes the political pressure from Clegg, which is the coalition priority".

So the Conservative members of the coalition won't rein in criticism of bonuses by Lib Dem ministers, notably Nick Clegg and Vince Cable, on the basis that the Lib Dems have to be thrown some kind of bone, given the self-harm they endured over student fees.

For what it's worth, the gossip in bank boardrooms is that Mr Varley is so miffed at the apparent implosion of his assiduous efforts to agree a deal with ministers (which went by the moniker of Project Merlin) that it contributed to his decision last week to step down as chief executive a few weeks earlier than originally announced.

Here is the fundamental obstacle to agreement: Britain's banks feel they cannot unilaterally and permanently cut bonus payments to their investment bankers, without in effect signing a death warrant for those operations (because their top people would quit).

Although investment banking in general has had a worse year in 2010 than in 2009, bonuses at Royal Bank of Scotland would still be a smidgeon over £1bn when they're announced early in the new year, if they are pro-rated on the basis of the 2010 payout.

And total remuneration for investment bankers at Barclays' investment bank, Barcap, (that's their salaries plus bonuses) would be somewhere between £5bn and £6bn, if trends for the first nine months of the year are sustained.

Now to be clear, for both RBS and Barclays these rewards to investment bankers go to thousands of people all over the world, not just in the UK. But, even so, at a time when the public sector and many parts of the private sector are still feeling the pinch, no mainstream politician is going to stand up and celebrate bonus payments running to billions of pound paid to bankers widely viewed as having made a particularly handsome contribution to the mess we're in.

However, the problem say the bankers is that in the absence of some kind of entente between the banking class and political class, the banks continue to feel discombobulated, and that makes it harder for them to join the common struggle to rebuild our economy (bankers, of course, say this more in sorrow, rather than as a threat).

So is there any scope for compromise? Well, it is interesting that Vince Cable, the Business Secretary, has been banging on about the need for banks to disclose precisely what they pay their biggest earners (to prevent what he calls the "fungus" of unwarranted pay spreading in the dark). His call for publication follows the decision of the Treasury in late November to shelve legislation that would have forced such disclosure.

It certainly wouldn't be hard for the chancellor to reinstate that legislation. And, as it happens, bankers tell me that they really wouldn't object to fiercely. As one said to me, "if we can't justify what we pay, we shouldn't be paying it".

Second, there is some bemusement that the Financial Services Authority didn't slightly toughen up the bonus restrictions agreed by European regulators when interpreting them for London. In particular, it might have made life easier for those who run our biggest banks if the FSA had imposed a ban on all cash bonuses - in that if none can pay in cash (as opposed to paying out in shares or subordinated debt) then they would not have to worry about losing people to rivals down the road.

So I wonder whether a common agreement to avoid all cash in bonus payments might not form the basis of some kind of truce with ministers.

Would that avoid all criticism of bonuses? Of course not. Bonuses paid in shares or subordinated debt will still be very valuable to the recipients, and will be seen by many as unfair and unwarranted.

But, at least, when shares are paid in paper rather than cash, there is some benefit to banks' depositors and creditors, in that the capital of the banks - and their ability to absorb shocks - is increased (although shareholders may resent the dilution of their interests).

UPDATE: 10.59: The Chancellor's plane has been delayed by the weather. So his meeting with the banks has had to be postponed, till later in the week.

 

Comments

Page 1 of 4

  • Comment number 1.

    Bankers busy rolling the dice and showing the elected politicians who is boss.

  • Comment number 2.

    It's hard to believe that both sides do not want some deal. That implies that the negotiators were in some way hobbled.

    Perhaps the Diamond geezer would have been a better choice to lead the talks ?

  • Comment number 3.

    As Will Hutton commented over the weekend - break up the big banks for the sake of the real UK economy.

  • Comment number 4.

    Robert,
    What is the size in the bank’s balance sheets they need to plug?
    How much is the subsidy they receive?
    How much has the economy lost as a result of their collapse?
    How can banks justify paying out Salaries at these levels when the above has not been addressed. My staff are on salary levels below the recession – and will continue to be – until our balance sheet has been repaired.

  • Comment number 5.

    No one has yet explained to me:

    1. Why the banks needed so much support when they are contemplating paying huge bonuses again.

    2. Which part of the banks operation is central to keeping our economy afloat. A bonus pot paid to thousands of people just doesn't do it for the millions of people struggling in the current climate.

    3. Who exactly lost what when the banks approached collapse - it turns out that it is us the tax payer this time.

    4. What plans are afoot to ensure this doesn't happen again without requiring us, the tax payer, to foot any bill.

    Surely it is time for our politicians to stop displaying veiled conflict of interest in the money in banking, and separate the truly speculative activities of the investment operations from the central economic services of credit to the voters. I don't care much if the beneficiaries of the investment banks lose some (or all their) money as long as the banks haven't taken our money and given it away!

  • Comment number 6.

    If bankers want to go and live in Switzerland or Singapore then let them. Odd places that would suit those without any moral fibre. And what is the problem with their 'top people' quitting, they are the ones who have overseen this catastrophe! Why are they still being rewarded? On the business of CDOs (let us not forget the overwhelming reason for the sovereign debt 'crisis'), it was evident that the investment houses were peddling rubbish ten years ago in the form of highly leveraged products and opaque mortgage backed bonds but nobody had the fortitude to stop the rot. Management of the banks was lax (yet ludicrously highly paid) and yet the taxpayer picks up the bill. Let them go to the wall, stop the bonuses completely and cap salaries. After the South Sea Bubble, issuing company shares was banned for a hundred years...

  • Comment number 7.

    Sorry, am I missing something? Borrow from BOE @ 0.5% and lend straight back to HMG @ 3% and then want a stonking great bonus because you are such a clever boy. Or else you will leave. Are you serious?

  • Comment number 8.

    I'm sorry, but I just can't see how the Government criticising the banks for not lending enough (especially to small businesses) is preventing them from lending more. Nor can I see how the criticism of large bonuses is preventing them from being reduced.

    So all that is really happening is that the Banks are trying to lean on the Government, "more in sorrow rather than as a threat." Ha!

    The question is, what is the real threat? Could it be that, behind closed doors, these men to whom the Government has ceded the sovereign right to 'mint' money are saying that they will orchestrate a run on the pound?

    Alternatively, are they saying that the banks are so weak that the bad-mouthing from the Government could lead to a run on the banks?

    Does anyone know?

  • Comment number 9.

    Robert - you need to stop gushing over the banks it's embarrasing for you.

    Don't read into JPM buying a couple of buildings that it's somehow a sign of a) recovery or b) they're sticking in this country.

    Buildings can be easily rented (or sat upon as they are at the moment) - whilst your clients foot the bill for the rent.

    Secondly, these are the same banks who didn't see the last credit crunch - what are the chances that they buy nice new buildings right before the commerical property collapse and don't see the next credit crunch?

    You give them far too much credit - clearly JPM are not the brightest buttons in the box because there is so much free office space in London - they could have owned 80% of Vauxhall for a fraction of the price.

    ...now who is sitting on all that property going nowhere?

    The morons don't know what's coming do they? I'm sure they will all be very sorry post crisis - just like they were the first time around.

    The clowns - even the CBI has caught on to the impending disaster
    http://www.bbc.co.uk/news/business-12033946

    Growth of less than 1% and inflation about 3% - sounds like stagflation to me folks. Still - what do the policy makers know - the last time we had stagflation George Osbourne wasn't even born!!

    (a special mention to all those airport travellers who are learning about 'the efficiency of the private sector' - where airports don't have facilities for winter weather such as this because some 'bean counter' deemed it a cost that could be cut - probably in the balmy summer. What a shame we let these private companies run the airports and now your holidays are ruined - should have checked the small print when signing up to free market Capitalism)

  • Comment number 10.

    "...given that all the talk recently has been of bankers flocking to Switzerland or Singapore..."

    You said it Robert - TALK - that's all it is. A lot of hot air, white noise, rabbit rabbit etc... whilst behind the scenes they've been assured that although the peasants will be led to believe that things might change, it will in fact be business as usual old chap i.e. massive bonuses all round.

    "However, the problem say the bankers is that in the absence of some kind of entente between the banking class and political class..."

    Is there a difference? From where I'm standing it's pretty difficult to tell them apart, despite the rhetoric. You only have to look at how many senior politicians have a City background to know that the idea of an entente is ridiculous - they're already all on the same side!!!

  • Comment number 11.


    UPDATE: 10.59: The Chancellor's plane has been delayed by the weather. So his meeting with the banks has had to be postponed, till later in the week.

    -----------------------------------

    Don't they have video conferencing?

    I thought these banks were global business!

  • Comment number 12.

    If they want to go, let's have a whip round for their airfare. it willbe cheaper than a repeat of the last disaster.

    Who knows, maybe they can destroy the Swiss economy too.

    Better idea, they should go to China and destroy that economy - oops they already did by overborrowing.

    Honestly (not a word they know), isn't it time the bonus was stopped?

    We need nurses, where is their bonus for doing a lot more for us? etc.

  • Comment number 13.

    At the risk of discombobulating other posters I am not in favour of some of these bonuses that are paid but nor am I in favour of publication of them either. Politicians want to publish simply to show they are effectual in what they are doing to stop banks causing problems in the future. The regulation we have to date will not do that.

    For the record I am not in favour of some of the hysterical (sorry for the emotive word but read them and stand back and ask if this is the sort of language of reason) posts wanting to decimate the banks to wreak revenge on them for past actions. The decimation of a proper banking system that generates profits benefits none of us and would ultimately cause the economy to self destruct. The politicians do understand that which is why they have acted to protect the banks from the electorate.

  • Comment number 14.

    Why are HMG so anxious to hang on to these people?

    This crisis was caused by their failure to recognize rubbish that was being peddled as AAA. Where was their 'skill', 'common sense', and 'experience' when they were selecting their investments? They have shown themselves to be magnificently incompetent.

    They should be urged to leave so that we can rebuild our economy. Their presence is a constant economic threat.

  • Comment number 15.

    Robert,

    The government looks pathetic on this issue. They do not care or understand the degenerate moral position that they have taken on this and many other issues but because they now see scenarios in which the general revulsion and anger many feel, particularly the young, will coalesce into something far more dangerous to their popularity and ultimately their grip on power and our collective wealth. So what do they do? Well they attempt to curry favour with pointless media stunts like this while planning the most vicious assault on the poor seen in 70 years.

    So lets look at a few facts:

    2009 - UK's richest 1000 increased their wealth by £77 billion. (Check Sunday Times Rich list) while the standard of living began to fall fast for millions.

    £120 billion in tax avoided by private individuals, foreign investors and companies.

    MP's bent or broke rules to make tens of millions avoiding capital gains tax on property deals or pumping up their expenses while youth unemployment reaches 20% and millions are denied any chance of affordable housing.

    The banks were further bailed out and rewarded themselves with £9bn in bonuses.

    Now we are about to attack housing benefit recipients (the poor) because in this insane system the cost to house them is higher than the rents the working can afford. This is madness. Why not treat the cause rather than the symtom.

    House prices are being propped up to reward the greedy and maintain the robbery of the nations wealth by the minority.

    I have recently found a job following a period overseas, I am a waitress on mininum wages, which is fine. I also get tips which can be £200 per week so my income is decent. My rent is £500 per month for a room in a scruffy flat with a rubbish shower which i share with 3 other girls. The landlord owns about 12 properties and pays almost no tax on the rent he gets because he can offset it against the interest on his mortgages. Some of the properties have tenants paid for by the state (I think he told me all this to impress me)

    Perhaps the answer is to remove some of these immoral tax advantages. The price of property would fall and so would rents and then the housing benefit bills would be far lower. Just an idea the young are talking about now. Also cutting banking bonuses might help reduce the silly sums paid for property in London.

    Perhaps cutting vital public sector workers and turning off lights at night is not such a good idea. How many of us live in streets where there is so little civic provision or public spirit that nobody has bothered moving the snow from the pavements or road. The consequence being people are falling over which for an old person can be very serious and many cannot get their cars out of the drive. Our leaders are failing us and most are too apathetic to care. Well that is going to change.

    The next big protest march is Januray 29th 2011 and the TUC are supporting it.



  • Comment number 16.

    What I don't understand is why we are 'negotiating' at all.

    Baclays and other banks who didn't take Government aid are free to do whatever they want, at the risk of their commercial arms collapsing if retail customers decide to take their business elsewhere.
    However, last time I checked HM Treasury was still the majority shareholder of both RBS and Lloyds, so surely it is within their power to veto renumeration packages that they don't approve of?

    As an aside, just to prove how hung up on bonuses the financial sector is, 5-live this morning had an interview with PWC's 'Head of Compensation'. Excuse me? A staff member whose SOLE responsibility is to determine bonuses? What does he do for the rest of the year? And come to think of it, who determines his bonus?

  • Comment number 17.

    Dont forget the pluck of the Irish who told their banks what for. I thought the best argument for not paying bonuses this year at least is that the cash is needed to secure the stability of the banks, to withstand credit crunch mark 2, and to be able to lend to support the recovery of the economy. Why oh why cant we be told what is so unique about the skills of bonus encrusted bankers that justifies so much state support and subsidy while the rest of us slide inevitably to penury?

  • Comment number 18.

    How many of our banks are actually "solvent"?
    http://www.accountingweb.co.uk/blogs/jefflcbba/mad-lemming/1500000000000
    If bonuses are being paid knowing that liabilities exceed assets, is this not illegal?

  • Comment number 19.

    > plucky efforts by John Varley, chief executive of Barclays, in talks
    > primarily with the Cabinet Office minister Oliver Letwin, to establish
    > some kind of entente cordiale between bankers and ministers are
    > close to collapse

    No surprise there, then. John Varley is probably trying to
    charm his way out of it, but we've got his number, now.
    Bankers respond best to the threat of penury or prison.

    > The mood of bank bosses about all this is one of despondency.

    Then the medicine is working. Despondency breeds fear, which is
    how we will control bankers from now on.

    > Varley is so miffed ... that it contributed to his decision
    last week to step down.

    More evidence that the medicine is working. He hates his job,
    which is right and proper, given the misery those bankers have
    inflicted on the public.

    > no mainstream politician is going to stand up and celebrate bonus payments

    That's right. Why reward the perps? There are votes in banker
    bashing - millions of them.


    > (it) makes it harder for them to join the common struggle to rebuild our
    > economy (bankers, of course, say this more in sorrow, rather
    > than as a threat).

    Nonsense - bankers only understand simple messages like penury or prison.
    They have to be told to pull their socks up or go to Swaziland.

    > The Chancellor's plane has been delayed by the weather. So his
    > meeting with the banks has had to be postponed, till later in
    > the week.

    Good – it gives bankers more time to stew in their own juices. Let's just
    hope this cut is the deepest possible, for the sake of our children,
    who should not grow up in the thrall of greedy London bankers.

  • Comment number 20.

    14. At 11:48am on 20th Dec 2010, TonyH wrote:

    > They should be urged to leave so that we can rebuild our economy. Their
    > presence is a constant economic threat.

    That's the trouble. They have threatened Britons, and we don't take kindly to blackmail. They have to go. And go now.

  • Comment number 21.

    18. At 12:26pm on 20th Dec 2010, jeff lampert wrote:
    "How many of our banks are actually "solvent"?
    http://www.accountingweb.co.uk/blogs/jefflcbba/mad-lemming/1500000000000
    If bonuses are being paid knowing that liabilities exceed assets, is this not illegal?"

    -----------------------------------------------------------------------------

    Answer ot your two questions.

    None, or they would be lending not repairing balance sheets.

    It's not illegal to pay bonuses if sectors of failing companies make a profit. But you see that word "Profit" the profit has to be REAL not an assumption of returns from traded promises to pay. Bonuses have been paid previously on profits that didn't materialise, unfortunately it's not illegal but it should be.

  • Comment number 22.

    #15. At 11:57am on 20th Dec 2010, RedHairedGirl wrote:

    The next big protest march is Januray 29th 2011 and the TUC are supporting it.
    -----------------------------------------------------------------------------

    See you there.

    The Unions call, I answer the call.

  • Comment number 23.

    ...surely as long as the banks are making money - then nothing else matters?

    ....surely?
    http://www.bbc.co.uk/news/business-12038480

    What a shame so many morons pin their hopes on the back of banks - we will end up saving the industry which contributes least at the cost of all others.

    Where will the people of Britain get their money from now that their 'home ATM' is out of action for the foreseeable future?

    What a shame the bankers don't realise this (or don't care) I mean it's going to look very bad for them when the housing market collapses and they come grovelling back for bailouts a second time.

  • Comment number 24.

    #9. writingsonthewall wrote:

    a special mention to all those airport travellers who are learning about 'the efficiency of the private sector' ... now your holidays are ruined - should have checked the small print when signing up to free market Capitalism

    Your obvious delight at the discomfort and misery of ordinary people, who apparently deserve to have their holidays ruined because their political views differ from yours, indicates clearly the kind of world we would live in if your revolution were ever to happen.

    Of course, if this were a Marxist state then the ordinary people would not be permitted to leave the country even if they could afford to.

  • Comment number 25.

    14. At 11:48am on 20th Dec 2010, TonyH wrote:
    Why are HMG so anxious to hang on to these people?

    --------------------------------------------

    Me, me, me - I'll tell you!

    Its pretty simple really.
    Financial services make up circa 20-25% of HMG's tax revenue.

    Now, seen as relatively small cuts to public services of something like 3% (not even yet enacted) have led to rioting in the streets in some parts, can you imagine what it will look like if they need to double or treble the levels of cuts?

    This is simply pragmatism - if only a few of the big banks move its billions that will need to be found elsewhere to pay for policemen, teachers, welfare cheques etc.

    It really is as simple as that - without these big banks tax revenues will fall to such an extent that the knock-on effects will be enormous.

    HMG is still beholden to the banks and thats why they're negotiating.

  • Comment number 26.

    Post 17.... not sure what you mean about the Irish... it is the overblown property market and CDO nightmare that forced the Irish government to bail out the banks, AIB in particular, that has caused the Irish state to become a European football as they can't afford to throw any more money at the finance sector... hence the Euro fund.

  • Comment number 27.

    11. At 11:29am on 20th Dec 2010, DebtJuggler wrote:

    "Don't they have video conferencing?

    I thought these banks were global business!"

    Ah but video conferencing can be 'hacked' and the politicians and bankers won't want their 'cosy little deal making' being released by Wikileaks.

    Where is Vince cable in all this? - all the 'big I am' about banks before he got elected and now he's just a lapdog for the ruling classes.

    Here vince - gofetchtheball.....there's a good mutt.

    Is there anyone left who will ever vote for the liberal democrats again?

  • Comment number 28.

    13. At 11:42am on 20th Dec 2010, mark_savill wrote:

    "For the record I am not in favour of some of the hysterical (sorry for the emotive word but read them and stand back and ask if this is the sort of language of reason) posts wanting to decimate the banks to wreak revenge on them for past actions. The decimation of a proper banking system that generates profits benefits none of us and would ultimately cause the economy to self destruct. The politicians do understand that which is why they have acted to protect the banks from the electorate."

    Maybe you can explore where the banks profits comes from before you blindly jump into defending them because "it's good for us"

    I can assure you that if all the banks failed the 'economy' would not, this is because the economy is the useful activity undertaken by all the little men and women each day - it has nothing to do with banks or bankers - they are merely parasites.

    The idea that we need money lenders might have flown before - however as they money lenders have actually failed in their primary responsibility then I find it hard to understand why you are defending them. I mean defending them because you haven't analysed where their profit comes from is one thing - but defending them after they have totally failed? - seems to me you are working from a vested interest as even the most hardened sychophant would think twice about defending the banks.

  • Comment number 29.

    We MUST stop the very few from robbing the vast majority - and make not mistake that is what is taking place. Let us hope that George Osborne's enforced delay will give him some thinking time (if he actually has any mental capacity - which I'll admit he has not yet shown!) and when he gets back he simply tells that bankers that their robbery is over. There will be no negotiations.

    There will be a National Maximum Income (set at5 David Cameron's level of 20 times the National Minimum Wage) for everyone (both resident, domicile and non-resident British national or foreign national) in the country and if they don't like it they can do whatever they want and by the way any British Citizen that leaves the country will still have to present a UK tax return of their global income and still be subject to the same rules as someone who stays here.

    All high net worth individuals will pay a 10% annual wealth tax on global wealth of over 5 million pounds and excessively wealthy individuals the annual wealth tax rate shall be 20% on wealth over 50 million pounds. These taxes shall apply to global wealth of British citizens or any foreign citizen who visits the UK for more than 48 hours a year - that latter payable before entry.

    Also we will have 40 banks in the UK in two years time all of roughly the same size. All the foreign business of a UK banks will be subject to a transaction Tobin tax of 10% of the transaction's value to be paid in cash in advance. All foreign exchange transactions will require specific permission of the regulators unless they are directly related to the trade in physical goods.

    We must not let the banks continue to destroy and subjugate the whole country. We want our country back and we are going to take it. There will be NO negotiations!

    Oh and by the way the foregoing may seen rather absurdly harsh and draconian but the bankers only have themselves to blame as they chose to rob and loot the country - now it is payback time!

  • Comment number 30.

    #24. At 12:48pm on 20th Dec 2010, rbs_temp wrote:

    Of course, if this were a Marxist state then the ordinary people would not be permitted to leave the country even if they could afford to.

    ------------------------------------------------------------------------------

    Are you sure about that? Really, really sure?

    For one, you could leave.

  • Comment number 31.

    @ 24. At 12:48pm on 20th Dec 2010, rbs_temp wrote:

    > Your obvious delight at the discomfort and misery of ordinary people

    You're imagining things now, rbs_temp. But it's good to heart that bankers in Swaziland (who can't afford to live in the UK) are stuck trying to get "home"!

  • Comment number 32.

    24. At 12:48pm on 20th Dec 2010, rbs_temp wrote:

    "Of course, if this were a Marxist state then the ordinary people would not be permitted to leave the country even if they could afford to."

    Also if we were a truly socialist state then we would not have the enormous inequality of income that would provide the hugely wealthy with the money to leave!

  • Comment number 33.

    24. At 12:48pm on 20th Dec 2010, rbs_temp wrote:

    #9. writingsonthewall wrote:

    a special mention to all those airport travellers who are learning about 'the efficiency of the private sector' ... now your holidays are ruined - should have checked the small print when signing up to free market Capitalism

    "Your obvious delight at the discomfort and misery of ordinary people, who apparently deserve to have their holidays ruined because their political views differ from yours, indicates clearly the kind of world we would live in if your revolution were ever to happen."

    No it doesn't - I find it hillarious that the sheeple of Britain are finding out the true cost of private sector bean counting....and doing what they always do best - moan about it.
    I see you like this too - you're all about the banks and supporting them, but I bet you're first in the queue to moan when they overcharge you or anything else they do which gets in your way. They support this idiotic state of affairs - these people sat by and watched the sale of British airports and did nothing - well now they must pay the piper.
    (of course they could just shut up and stop filling my news moaning about it - that would be acceptable)

    "Of course, if this were a Marxist state then the ordinary people would not be permitted to leave the country even if they could afford to."

    Quite right too - and none of this 'jetting off to Bangkok' for winter - I mean this poor lady's children are 'traumatised'!

    http://www.bbc.co.uk/news/uk-12034317

    "She said they slept on the floor on Saturday night and that her children were still traumatised by the experience."

    It seems that the private sector is now traumatising our children - and you talk of the human rights abuses in China and North Korea?

    You should be ashamed of yourself - think of the poor little children!

    Maybe if you weren't so quick to jump on the emotional bandwagon and try to pull silly 'shocked and appaled' Daily mail faces at everything I wirte you might have time to see what sort of 'poor people' you are defending.

  • Comment number 34.

    25. At 12:48pm on 20th Dec 2010, VinChainSaw wrote:

    "Its pretty simple really.
    Financial services make up circa 20-25% of HMG's tax revenue."

    Ah but these are the pre-recession figures - I wonder what contribution they are making now.?......and more importantly have the coalition factored in the huge downsizing of operations going on in the City of London at the moment?

    Tax receipts are likely to collapse further - you know the banks don't like paying taxes - they are simply for the little people you know..

  • Comment number 35.

    30. At 13:05pm on 20th Dec 2010, NorthSeaHalibut wrote:

    > For one, you could leave.

    Replace "could" with "must".



  • Comment number 36.

    24. At 12:48pm on 20th Dec 2010, rbs_temp wrote:

    "Of course, if this were a Marxist state then the ordinary people would not be permitted to leave the country even if they could afford to."

    ...everyone else is having a go - I can't miss out on this one!

    If this were a marxist state then there is a good chance we'd all be going on holiday as our incomes would not have been robbed from us by robber banks - and if we were controlling our fixed exchange rate and financial system (as only a centralised government can) then maybe the Americans would be coming to us to beg we revalue rather than allowing them to screw us over with their currency wars - which will lead to a stronger pound (and weaker exports).

    Still - you think this is 'only a recession' - so what do you know about anything?

  • Comment number 37.

    Could the government be enrolled in Bankaholics Anonymous? We need to wean them off their dependency on the financial sector at whose teat they have been sucking all these years.

    At the same time we need to understand that exporting our jobs to India and China is like being dependent on the good will of the local pawn-broker.

  • Comment number 38.

    12. At 11:37am on 20th Dec 2010, Gareth wrote:

    > Who knows, maybe they can destroy the Swiss economy too.

    We don't want any economy to be destroyed. We just want to have a proper economy, where bankers know their place.

    Their job is provide finance, like utility firms provide water, gas and electric. Banking is very easy, cheap, low tech and instantly replaceable. And it doesn't even need us to dig up the roads to lay pipes.

    Anybody can start banks, so let them (force them?) to leave. We can make as many cheapo banks as we need, no sweat.


  • Comment number 39.

    34. At 13:14pm on 20th Dec 2010, writingsonthewall wrote:

    > Tax receipts are likely to collapse further - you know the banks don't like paying
    > taxes - they are simply for the little people you know..

    Rather than lament the departure of greedy bankers, let's walk on our own legs, without all this "financial engineering". It's a crock, basically. It just doesn't work in the end, as we know.

  • Comment number 40.

    Talk of quitting the UK by banking spivs for greedier climates ... where are they going to go ? Let them go I say ... the sooner the better ... others will take their place and the bank shareholder and customers will not know the difference?

    Bankers bonuses ... let's have full disclosure on all bonuses - past and present ...now ... there is no justification of this corporate fraud when banks are being propped by the taxpayer ... or indeed at any time.

    The banks have ruined the UK domestic economy by continually financing the purchase of UK assets by foreigners ... prancing immigration goon Cable should be asking about the strategic effect of the massive loss of opportunity cost by bankers preference to sell off British assets to foreign buyers ... if the bankers did not put forward the capital then this erosion of UK plc would not have and would not keep happening.

    Bankers bonuses could be calculated by:

    - improvements towards zero unemployment for British workers
    - additions to British manufacturing and 'process added value'?
    - investments in UKPLC that lower the costs base of UK operating costs e.g. infrastructure, green technology
    - many other ways ... if their skills and services are so highly regarded that their bonuses must be protected as they are immune from public information requests, govt enquiry, tax office enquiry, UK law and moral and other scrutiny.

    There are many ways of calculating bankers bonuses ... but we are not even to allowed to know in reasonably and proper full detail how a single bonus is being calculated.

    Surely, there is criminal intent now with this bonus fiasco ... surely it is time that the Serious Fraud Office are asked to investigate and cases put before the Director of Public Prosecutions ... this is now a national serious crime issue and it is high time that we have some action on this.

    I see that Zanu Labour are very quiet at the moment ... they made sure that the Banks were allowed to pay excessive bonuses and set up an elaborate and expensive hoax to fool the taxpayer and electorate that the Goondog Gordo Silly bandwagon was/is serious about tackling this corrupt vested interest.

    It is called corruption, fraud, sleaze, embezzlement ... serious crime and criminal conspiracy... we could do with a petition for us all to sign requesting a full criminal investigation and charges to be raised against the offenders ... including govt ministers who have protected/still protect this activity.

    We need to see bankers facing charges just like MP's over their expense claims.

    This is it ... this is the time...

    Bankers Bankers Bankers ... Porridge Porridge Porridge

  • Comment number 41.

    #29 John

    "All high net worth individuals will pay a 10% annual wealth tax on global wealth of over 5 million pounds and excessively wealthy individuals the annual wealth tax rate shall be 20% on wealth over 50 million pounds. These taxes shall apply to global wealth of British citizens or any foreign citizen who visits the UK for more than 48 hours a year - that latter payable before entry."

    I agree that UK citizens who park their assets abroad should be taxed on them, and 10% seems low enough that they would pay without looking at avoidance, we could get a lot of new revenue from this stream

    However - you can't ax holiday makers! Visit England for 48 hours and have your entire wealth taxed?? Ridiculous......also if people leave the UK you can't tax them on earning in their new country of residence

    We can't be held to ransom by any bank that is supported by tax payers money, they have to realise that without our support they would be bankrupt!! Then they wouldn't even have a job to get a bonus for. HSBC and Barclays can pay what they want, we don't own them; they are responsible to their shareholders/boards

    RBS and HBOS can swing as far as i'm concerned. Until they pay us back they don't get a say

  • Comment number 42.

    Does anyone remember those IPO's that were being trumpeted around as "a sign of recovery" a year ago?
    http://www.guardian.co.uk/business/marketforceslive/2010/dec/20/gartmore-loses-bid-disappointment

    I hope you're learning the pattern is always - bluff, bluff and bluff some more - it's the only way 'to recovery'...

  • Comment number 43.

    It seems fairly unequivocal on this blog... what do you think will happen after the snow has cleared?... JPMorgan... don't they employ Bliar, the friend of big oil and former PM? Have they bought one of the buildings for his 'Kuwaiti save-the-world by treating people fairly consultancy'?

  • Comment number 44.

    mark_savill - good post. The same electorate that vote for spending increases election after election. Simpler to blame one part of the problem.

    writingsonthewall # 9

    "clearly JPM are not the brightest buttons in the box because there is so much free office space in London - they could have owned 80% of Vauxhall for a fraction of the price."

    yes that's right. They are spending tens of millions but forgot to look in Vauxhall and you spotted this. Well done. Or there could be other factors that you know nothing about.

    "Ah but video conferencing can be 'hacked' and the politicians and bankers won't want their 'cosy little deal making' being released by Wikileaks."

    Another uninformed comment. Trust me video conferencing can be made secure. For a start I think the US government still can't crack skype, and that is just one encryption possibility. Probably HMRC don't have the facilities or the meeting isn't seen as that important.

    I'm not supporting the bankers in these comments, but why bother to have so many posts that are so childish? Get rid of all banks, hacking etc. Posts today are really poor.

    RedHairedGirl - spot on about people with 12 mortgages. This is one of the main causes of the problem. We are all spending vast amounts of our income on keeping a roof over our heads and in debt up to the eyeballs on it, and much of the money "made" off the back of this has been spent on unproductive assets.

    ps let's hope the bankers don't intercept one or more of the posts on this blog in whatever fantasy world people live in. Must go - I've watched the Bourne Identity 15 times but boy it's so realistic!!!

  • Comment number 45.


    The taxpayers of this (and other) countries will not get any kind of satisfactory result from these talks.

    Why?

    Because politicians are either complicit in the massive fraud currently being perpetrated by the so-called "ruling classes" over the ordinary working citizens of this country, or they are completely inept and unable to stop it happening.

    If you take out a loan from a bank, they may charge you 6%. Where did they get the money from to give you this loan in the first place? Well, we the taxpayers "lent" it to them at 0.5%. And where did we get it from originally? We borrowed it from the IMF at a further 5%. And where did they get the money from........etc. etc.
    (The percentages might not be totally up to date, but you get the picture)

    So, at every stage, money which doesn't actually exist is being lent and re-lent, all going round in circles to keep the system going. And at every turn, the taxpayer is being milked and is falling into ever increasing debt.

    Meanwhile the bankers, who are no more than simple enablers (paper shufflers), collect their huge bonuses from money skimmed off the top and paid for, ultimately, by the taxpayer.

    The end-game is upon us already.

    Check out the Youtube video "Money as Debt". You will be horrified.

  • Comment number 46.

    Conservative government - does anybody seriously expect them to address the banking bonus behaviour ? Sure, cut benefits for the needy, cut education for poor children but do anything to reduce massive incomes for the already very wealthy ?

  • Comment number 47.

    34. At 13:14pm on 20th Dec 2010, writingsonthewall wrote:
    25. At 12:48pm on 20th Dec 2010, VinChainSaw wrote:

    "Its pretty simple really.
    Financial services make up circa 20-25% of HMG's tax revenue."

    Ah but these are the pre-recession figures - I wonder what contribution they are making now.?......and more importantly have the coalition factored in the huge downsizing of operations going on in the City of London at the moment?

    Tax receipts are likely to collapse further - you know the banks don't like paying taxes - they are simply for the little people you know..

    -----------------------------------------------------------

    WOTW,

    Yeah they are pre-recession figures but then the vast majority of the tax collected from the financial servcies sector is via PAYE and that is unlikely to have fallen much.
    The point stands as if revenue drops a percentage point that shortfall needs to be borrowed or expenses need to be cut.
    One percentage point would lead to much bigger cuts in public expenditure than those that precipitated the student protests.

    To put this in perspective the student fee hikes are to cover a shortfall of c£3bn (per the media - I dont have a more accurate number so feel free to interject and provide).
    HSBC's total taxable UK compensation last year was £4.5bn, so a tax take for HMRC of about £2bn.
    And there is no get-out for this sort of pay, no structuring, no non-doms status etc.
    Add on to that the bank levy, corporate tax paid, tax on dividends declared and all the little people that also generate income via association with HSBC and the tax take gets decidedly higher.

    That's the perspective - HSBC moves abroad and that hole has to be plugged... with cuts akin to those that brought rioting students to our streets.

    Dont get me wrong - I'm no defending the banks, I'm just being pragmatic. We cant live without the tax generated by the banks, not in the short-term anyway.
    Over the long-term we can wean ourselves off it by encouraging other forms of business that will generate tax takings but losing that sort of revenue now would force up the price of our debt and likely lead to down-grades and we'll be facing the same problems Ireland are facing.

  • Comment number 48.

    Ah, thats Boy George stuck on his jaunts telling the rest of the world that the UK is pinning all hope on the financial sector, the alchemists.

    How to make enemies and lose friends!

    Bit of a duffer, not doing the reputation of his alma mata one bit of good is he?

  • Comment number 49.

    29. At 13:03pm on 20th Dec 2010, John_from_Hendon wrote:

    Lol. So you want to tax wealthy people 10% of their net worth every year.
    That's more than the investment returns most long-term investors expect to make in a year. So year on year they'll be losing wealth and in ten years they'll have nothing left. Do you really think that's viable?

    If you cant see the error in your numbers then there really is no point in debating it!

  • Comment number 50.

    Calm down, calm down, Roberts just been for a nice Xmas lunch and a brandy with his banker mates. Nothing is going to happen, a little more hot air will be expelled, but not enough to create a thaw, Prime Minister, Chancellor and Vince will mutter dire warnings, look angry and the banks will say how sorry they are but it is a global issue.

    By Boxing day all will be forgiven and by New Years day all will be forgotten. The Government will continue to plunder their expenses, their second jobs and line up their retirement fees. Those deemed to have no voice (eg. English students facing UK apartheid) will see a 300% increase in their costs and will be encouraged into a lifetime of debt, the rest are assumed to have no long term memory and will be hit with tax increases, further job insecurity and real terms inflation rocketing.

    Never been on a march, never want to march BUT it is probably the only way the country will see real change. However, we have no political will, vision or leadership from any party to instigate the deep changes needed to turn the country around.

  • Comment number 51.

    25. At 12:48pm on 20th Dec 2010, VinChainSaw wrote:
    14. At 11:48am on 20th Dec 2010, TonyH wrote:

    Me, me, me - I'll tell you!

    Why are HMG so anxious to hang on to these people?This is simply pragmatism - if only a few of the big banks move its billions that will need to be found elsewhere to pay for policemen, teachers, welfare cheques etc.

    and:-

    It really is as simple as that - without these big banks tax revenues will fall to such an extent that the knock-on effects will be enormous.

    HMG is still beholden to the banks and thats why they're negotiating.

    =====================================================
    Your opening sentence speaks volumes!

    You have omitted to mention the vast amounts of public money that are being spent to bail out the banks. Furthermore, we are facing many years of austerity whilst being lumbered with a crippled economy.

    Am I really expected to be grateful that the banks, having caused the problem, are prepared to stand by us during these difficult times?

    What utter nonsense!

    To demonstrate their poor judgement, they now propose to pay obscene levels of bonuses whilst the vast majority of people face a very uncertain future.

    Hubris has given way to arrogance - and the bankers refuse to accept that they have ruined the economy. If they had a shred of decency, they would refuse to accept payment for failure. And please, don't tell me that they have earned it.

    They owe us - BIGTIME!


  • Comment number 52.

    I've got to thinking about Edmund Burke - Wikiquote (not leak) "Whig politician and statesman who is often regarded as the father of modern conservatism" and the quotation about good men doing nothing for evil to triumph... having a quick scan through his attributed quotes it is a bit of a reading list for this situation...
    "There is a sort of enthusiasm in all projectors, absolutely necessary for their affairs, which makes them proof against the most fatiguing delays, the most mortifying disappointments, the most shocking insults; and, what is severer than all, the presumptuous judgement of the ignorant upon their designs."
    "There is, however, a limit at which forbearance ceases to be a virtue."
    "It is a general popular error to suppose the loudest complainers for the publick to be the most anxious for its welfare."
    "Your representative owes you, not his industry only, but his judgment; and he betrays instead of serving you if he sacrifices it to your opinion."
    "People crushed by law, have no hopes but from power. If laws are their enemies, they will be enemies to laws; and those who have much to hope and nothing to lose, will always be dangerous."
    "Whenever a separation is made between liberty and justice, neither, in my opinion, is safe."
    "If any ask me what a free Government is, I answer, that, for any practical purpose, it is what the people think so, — and that they, and not I, are the natural, lawful, and competent judges of this matter."
    "Corrupt influence, which is itself the perennial spring of all prodigality, and of all disorder; which loads us, more than millions of debt; which takes away vigor from our arms, wisdom from our councils, and every shadow of authority and credit from the most venerable parts of our constitution.".....

    I don't quote conservatives much, but there are a few lessons to take on board...

  • Comment number 53.

    44. At 13:51pm on 20th Dec 2010, Ben wrote:

    RedHairedGirl - spot on about people with 12 mortgages. This is one of the main causes of the problem. We are all spending vast amounts of our income on keeping a roof over our heads and in debt up to the eyeballs on it, and much of the money "made" off the back of this has been spent on unproductive assets.

    ---------------------------------------------------

    Just another reason to raise interest rates and flush out the property gamblers.
    I honestly dont know why they are being protected with super-low interest rates.

  • Comment number 54.

    What a lot of hot air.

    Several City banks paid their annual bonuses last week with more to follow over the coming days and weeks.

    Whilst there may well be the opportunity to impose legislation or seek agreement from the industry realistically it is already too late to adjust payments equally across all of the institutions for this year.

    If there is going to be changes for next year the likely effect is that normal bonus payments for 'top' performers will be transferred to salary and therefore paid monthly, HMRC will get a little bit more a little earlier in the year in the way of PAYE tax and the individuals will get greater clarity around their pay through the year rather than a big spike when bonus was due.

    Wake up everyone whether you like it or not that is the reality.

  • Comment number 55.

    51. At 14:09pm on 20th Dec 2010, TonyH wrote:

    Maybe you could enlighten me as to how much money is being spent to bail out Barclays, HSBC and Stabndard Chartered, because those are mostly the banks we're referring to that could feasibly move.
    RBS and Lloyds are stuck here.

    Just to clarify - I dont like what they're doing, but I like what some on this forum (including you) are proposing even less.
    Chasing the banksters away will make our problems much, much worse.

  • Comment number 56.

    Just in case anyone have ideas of 'punishing bankers' for the 'evils' they have done, let's just remind ourselves what the 'lay of the land' looks like:
    - Those who made really big money in the pre-crash/pre-crisis years have left the banks are now working in places that are outside regulated institutions or have left the industry.
    - For evey one banker who made 'mega bonus', there are thousands who are just eeking out a living.
    - The financial services industry, even after the financial crisis, still contributes around 15% of the UK GDP, while employing less than 1% of the UK work force.
    - The bigger the bonus paid, the bigger the tax receipt for the government. Never forget, the largest beneficiary of bonuses is the Government.
    - You don't want to kill (or scare away) the duck that lays the golden egg. There may not be immediate moves away from the UK, but it makes the decision to move away that much more convincing.
    - Can you think of another industry or group of industries that can take up the slack?
    - How is making banks lend to stuggling businesses a way of making banking more 'safe'?
    - (One last one) for this year, at least, those who generate revenues are not responsible for lending to the small business and mortgage borrowers in this country.

    Taxing the banks and the 'bankers' is just a quick, populist, knee-jerk reaction to 'public anger'. At best, a messy way to cover up the complete lack of progress in reforming both the regulation and functioning of banks and other financial institutions on a global scale. At worst, it is slowly killing off the most viable industry of this country.

  • Comment number 57.

    33. At 13:11pm on 20th Dec 2010, writingsonthewall wrote:
    24. At 12:48pm on 20th Dec 2010, rbs_temp wrote:

    >No it doesn't - I find it hillarious that the sheeple of Britain are finding out the true cost of private sector bean counting....and doing what they always do best - moan about it.

    ==================================================

    Please don't refer to your fellow man/woman as 'sheepie' - It's bad manners.

    How would you feel if someone referred to you as 'Knucklehead'?

  • Comment number 58.

    49. At 14:08pm on 20th Dec 2010, VinChainSaw wrote:

    29. At 13:03pm on 20th Dec 2010, John_from_Hendon wrote:

    Lol. So you want to tax wealthy people 10% of their net worth every year.
    That's more than the investment returns most long-term investors expect to make in a year. So year on year they'll be losing wealth and in ten years they'll have nothing left. Do you really think that's viable?

    ------------------

    Nope. In ten years they will still have just shy of 35% of their original wealth left, even assuming they earned nothing at all during that period.

    If you cant see the error in your numbers then there really is no point in debating it...

  • Comment number 59.

    Let's call the banker's bluff. There is no correlation between rewards and performance for complex non-mechanical tasks! Indeed studies find that there is a negative correlation between high rewards for complex conceptual tasks. The MIT Study by behavioural Economists financed by the Federal Reserve so it is not a left wing commissioned study.

    It is a confidence trick perpetrate by investment bankers. Let them go to other countries if that is what they want. If we cannot split investment banks from high-street banks, then I would prefer they go to Dubai or Abu Dhabi. Let these regime bail these bankers when they crash the system again.

    If you want to see the evidence, look at YouTube with the string "RSA Animate - Drive: The surprising truth about what motivates us!.

  • Comment number 60.

    56. At 14:19pm on 20th Dec 2010, spikegifted wrote:

    Exactly my point. Its not as if the UK is currently producing any other star industries that could even come close to the dmoinance of the city.

    Kicking the bankers out now is akin to resigning your job with not even a single interview lined up and no feasible prospects.
    Oh, and a huge mortgage and wallet-busting credit card bill thrown in for good measure.

  • Comment number 61.

    Here's a problem: banking is complex and needs clever people to invest (should that read gamble) wisely and yet morality is not complex and only needs common sense to understand.
    It is unjust and unfair to reward people with too much money when old people die in cold homes from hypothermia.
    It is unjust and unfair to reward people with too much money when folk who cannot think straight are living on the streets in Arctic conditions.
    It is unjust and unfair to reward people with too much money when old people's homes are being closed.
    And to all of you who think old people should look after themselves in their freezing homes or at least be looked after by the Big Society and those who think people on the streets are usually druggies who deserve it and those who think old people in homes don't have rights because they are just a cost I say this: the day will come when you are old, the day could come when you are on the streets, the day may come when you stop being apathetic and start to think humanity not bonusses.

  • Comment number 62.

    #55 See my post on bonuses. WE cannot let Bankers hold us to ransom. Also, they are bluffing!

  • Comment number 63.

    '49. At 14:08pm on 20th Dec 2010, VinChainSaw wrote:

    29. At 13:03pm on 20th Dec 2010, John_from_Hendon wrote:

    Lol. So you want to tax wealthy people 10% of their net worth every year.
    That's more than the investment returns most long-term investors expect to make in a year. So year on year they'll be losing wealth and in ten years they'll have nothing left. Do you really think that's viable?

    If you cant see the error in your numbers then there really is no point in debating it!'

    Quite right!

    We couldn't possibly think of the possibility of reducing the wealth of the very wealthy, the wee lambs. That sort of thing is reserved for the ordinary members of the society.

    (Hand hits forehead)

  • Comment number 64.

    For those who think we need the tax on the profits from the banks so badly that we have to accept everything they say then do they know how much the country has already spent in years previous that now needs to be returned to the banks.

    the treasury does receive tax but from those employees who work in financial services as they do from employees everywhere.

    However corporation tax is more doubtful as banks are still offsetting their losses from tax paid in previous years and their accountants will make sure they maximise those losses to the full.

    So who owes whom the most. Government who have already spent the money or the banks who have been bailed out partly with their own cash to be claimed back against previous years' losses.

    And at what point will the banks make real profits again that can be taxed for the good of the country. Too vast and too complicated a subject for the layperson to comprehend so we continue to be fooled by our lack of understanding.

    But some clever accountant somewhere must have the answer.

  • Comment number 65.

    58. At 14:21pm on 20th Dec 2010, tired_of_the_lies wrote:

    Okay... doesnt make the point less salient. But good spot nevertheless.

  • Comment number 66.

    The idea that banks can't cut bonuses because they lose employees in fatuous. That might happen if one bank unilaterally cut and all others didn't. But if all the banks - commercial as well as the glorified hedge funds like Goldman Sachs, et al - were forced as a group to reign in the bankers would have no where, other than retirement, to go. I suppose they could risk their own capital go private, but that's not their style; they like to use other people's money.

    If the authorities can not do anything about pay that should use the tax system to recoup the subsidy they gave the banks during the bailout.

  • Comment number 67.

    #58 spikegifted

    The bankers are bluffing. There are many more reasons why they should operate in the UK than in some other countries and far from driving them out, constraining the bonus culture would have a positive effect on overall performance. All bonuses do in these situation is to encourage bankers to 'game' the system.

    I would go further, I question the validity of such high rewards for senior directors and company executives. Do they lead to better performance? There is little objective evidence to suggest that higher rewards lead to better performance!

  • Comment number 68.

    re travel chaos (a bit off topic, but as usual WOTW has written more than Robert so his rant becomes the topic).

    This is how the centrally planned economy of China coped with uncommon weather (as in worst in decades).

    http://news.bbc.co.uk/1/hi/world/asia-pacific/7214562.stm

    Was the weather worse - probably. Was the disruption worse - yes.

    PS You get bean-counters in government too. Hopefully we can all agree on this. Labour isn't infinite. Somebody has to decide where to apply it. Decisions are made by humans and most of make mistakes.

  • Comment number 69.

    44. At 13:51pm on 20th Dec 2010, Ben wrote:

    That's right. Video conferencing can be made secure. By the IT Admin, who has a brain, can see what is going on, has access to all the technology needed to record, or broadcast to the world.

    Now, how much does he get paid?
    All the IT admin people I've ever known have a very strong sense of morality, the kind of thing that can't be bought off.

    And then there is the kind of thing where there are allegations of a soldier with fake CDs making copies.

    The largest security threat to any operation are the employees, whether that is in banking, or indeed, even those robbing the bank who fear either a 'plant' or someone with a big mouth!

  • Comment number 70.

    63. At 14:29pm on 20th Dec 2010, copperDolomite wrote:

    Copper - I understand you'd love that course of action but you have more chance of selling ice to an eskimo.
    There is no rational person that would ever willingly give up the fortune they've made in taxes if they can help it.
    You over-estimate how far you can push people.

  • Comment number 71.

    The UK Government is underwriting the banks toxic liabilities to the tune of £500Bn. The banks can't leave, even if they wanted to.

    As for individual "talent" leaving.... Let them. These are the imbeciles that brought misery to hundreds of millions of people through greed and idiocy.

    Anybody that greedy doesnt deserve to live in this Country.

    Every business wants to be an upper quartile payer. I would like to pay my staff much more. If I am making a loss and need to sponge money from the Government though I cant see how it can possibly be justified until every penny has been paid back.

    As for the level of tax from the banks...The figures being quoted here (e.g 60Bn) are a) pre depression values and b) are for the whole financial intermediaries sector including insurance and other non bank sectors.

    This is all beside the point though. A lot of this is about what type of Country we want to live in.

    Those that caused the depression and wrecked the lives of tens of millions need to pay.

    We want them to go to jail (in what way is what the banks are doing different from what Bernie Madoof was doing?) but if we cant have that we want structural reform of banking so this can never happen again and at the very least we want absolute axeing of the level of remuneratoin for people working in loss making organisations who still owe the tax payer hundreds of billions of pounds.

    If we don't get satisfaction from politicains I should think they will get a rough ride and if that doesnt work things might deteriorate even further.

  • Comment number 72.

    22. At 12:47pm on 20th Dec 2010, NorthSeaHalibut wrote:
    #15. At 11:57am on 20th Dec 2010, RedHairedGirl wrote:

    The next big protest march is Januray 29th 2011 and the TUC are supporting it.
    -----------------------------------------------------------------------------

    See you there.

    The Unions call, I answer the call.

    ================================================================

    As do I. We're coming to get the Banking Boogeyman and their inept, sychophantic sponsors.

  • Comment number 73.

    @ 15 RedHairedGirl :
    "Perhaps the answer is to remove some of these immoral tax advantages."

    While you may not like the fact that your landlord has investment properties, the simple truth is that he is a businessman and each of the properties is run like a company: your landlord borrows money to fund the purchase (like any company) and the interest on the loan is offset by income. He is taxed on the difference between the two: the profit. This is exactly the same as every other business/company in the UK, including the place where you do your waitressing.

    Does that make you want to have a go at your boss now too for the "immoral tax advantages" he gets offsetting legimitate business expenses against tax? Things like your wages (a business expense), heating & lighting (a business expense), the bank loan on his restaurant (a business expense) and all the other things he has to pay out to keep the business running.

    And let's not forget that without these people taking the loans out and taking the risks with their own hard-earned cash to fund their businesses, you wouldn't have a place to work or a place to take a (dodgy) shower.

    All may not be well with the world, but we would be better off pointing the finger at the right people rather than randomly

  • Comment number 74.

    70. "VinChainSaw wrote: You over-estimate how far you can push people."



    We don't have to push them far. Most of their offices are in tall buildings anyway.

    Just a little shove is all that's required.

    Let gravity do the rest.

  • Comment number 75.

    44. At 13:51pm on 20th Dec 2010, Ben wrote:

    "mark_savill - good post. The same electorate that vote for spending increases election after election. Simpler to blame one part of the problem."

    Sorry Ben - but your simplistic view on life is not good enough for the clever world of politics and banking. The people voted for spending increases year on year because with their work going up, taxes going up and effort going up they foolishly believed that they were getting richer.
    More fool them that they didn't realise it was all a 'funny money' scam and that although they were working harder and longer they were in fact getting poorer - because all your banking friends were sucking the life out of any increased productivity and using it to gamble on american mortgages (or did we forget that when we dutifully reminded the people that just because they're working harder - it doesn't mean they're entitled to more??)

    "yes that's right. They are spending tens of millions but forgot to look in Vauxhall and you spotted this. Well done. Or there could be other factors that you know nothing about."

    Well consdiering these 'experts' are very long on the municipal bond market in the US and most of the states are bankrupt - then I would say that there is a good chance there is another booboo in the pipeline. I'm sure JPM were just as careful in investing in this new glass house as they were when they dived into the CDO market - yes?

    "Another uninformed comment. Trust me video conferencing can be made secure."

    No - you are uninformed - the US Government can't make it's military secrets safe from hackers - what chance is there of a UK Government video conference. Alas yet another 'put my faith in technology' fish in a big sea. Well you can trust me - video conferencing is not and cannot be made totally secure.

    "For a start I think the US government still can't crack skype, and that is just one encryption possibility."

    The US military can't - but others can! Oh ye have little faith (and not surprising if you think the US military is the b all and end all of internet security!)

    http://techie-buzz.com/tech-news/hacker-cracks-skypes-proprietary-voip-protocol.html

    "Probably HMRC don't have the facilities or the meeting isn't seen as that important."

    Well they should have the facilities - they have enough buildings and what do you mean it's not important - it's the UK economy at stake man! Stop making excuses for a patheitc Government undone by a bit of weather.

    "I'm not supporting the bankers in these comments, but why bother to have so many posts that are so childish? Get rid of all banks, hacking etc. Posts today are really poor."

    I'm not supporting bankers but....

    These posts are not childish - they are showing the exasperation as the Government smooches up to banks and lets them get away with murder while the rest of us witness the biggest and now most incompetent roberry in our lifetimes.
    ...meanwhile you come along and start defending these clowns - clearly your memory is short (or tainted) because we're entering a bitter period of poor industrial relations, joblessness, high inflation and little growth and it's largely to do with the banks taking money from the economy before it was made - still that's probably a little too complicated for you so we're dumbing it down and being childish.

    "ps let's hope the bankers don't intercept one or more of the posts on this blog in whatever fantasy world people live in. Must go - I've watched the Bourne Identity 15 times but boy it's so realistic!!!"

    Spoken like a true subservient slave - well done that man, keep your head down - don't want no trouble here. Doth your cap to the master on the way out.....

    What sort of excuse for a man are you? First sign of trouble and you're running to our kidnappers and telling them how much you've always admired them!


    P.s. Apologies for destroying your image of skype and it's invincibility - maybe you shoudl start unplugging all of those wires...

  • Comment number 76.

    ha! hit the POST button by mistake... you get the picture though

  • Comment number 77.

    47. At 14:05pm on 20th Dec 2010, VinChainSaw wrote:

    "Dont get me wrong - I'm no defending the banks, I'm just being pragmatic. We cant live without the tax generated by the banks, not in the short-term anyway."

    But VinChainSaw - all that tax is merely recycled anyway!

    Bank has capital
    Bank lends capital to business
    Business makes things which are sold and produce money
    Business is taxed on it's 'productivity' by the Government
    Bank takes cut of business takings (interest)
    Bank pays taxes on cut of business takings (interest) to Government

    We could simplify this by removing banks and increasing the tax on businesses slightly. They won't notice as it will just replace the 'tax' that is interest by the banks - but the treasury will notice.

    The failure comes with the banks taking some of that capital interest and keeping it for themselves - thereby removing it from the cycle.

    This is why we don't need banks - they're not actually earning anything, they are merely stamping part of the busines's earnings as their own.

  • Comment number 78.

    73. At 14:48pm on 20th Dec 2010, 4FoxAche wrote:

    Lol. Yes if you couldnt write off expenses against income that wouldnt be income tax at all, it would be VAT!

  • Comment number 79.

    55. At 14:17pm on 20th Dec 2010, VinChainSaw wrote:

    "Maybe you could enlighten me as to how much money is being spent to bail out Barclays, HSBC and Stabndard Chartered, because those are mostly the banks we're referring to that could feasibly move."

    Billions - how do you think all their mortgage customers are staying afloat - and who do you think it paying for it all???

    http://www.telegraph.co.uk/finance/economics/8192291/Bank-of-England-keeps-interest-rates-at-record-low-as-trade-gap-widens.html

    Come on VinChainSaw - you seem to be developing stockhom syndrome!

  • Comment number 80.

    56. At 14:19pm on 20th Dec 2010, spikegifted wrote:

    "At worst, it is slowly killing off the most viable industry of this country."

    What an insult to all the real industries out there - so please tell us what did the 'banking industry' produce in the last 10 years?

    One of the definitions of industry is "systematic work or labor. " - there's not a lot of labour going on in banks - or did you believe that nonsense about it being a 'hard job'?

  • Comment number 81.

    57. At 14:20pm on 20th Dec 2010, TonyH wrote:

    "Please don't refer to your fellow man/woman as 'sheepie' - It's bad manners.

    How would you feel if someone referred to you as 'Knucklehead'?"

    Well if I acted like one then I would deserve it - if people act like sheep then they will be called sheeple.

    It's the only way I can stay sane - believeing that only some humans are this backward. Otherwise I have to assume you're all like it and that usually leads to serial murder.

    The possibility that these people are in fact the majority is far too much to bare thinking about.

  • Comment number 82.

    '70. At 14:42pm on 20th Dec 2010, VinChainSaw wrote:
    63. At 14:29pm on 20th Dec 2010, copperDolomite wrote:

    Copper - I understand you'd love that course of action but you have more chance of selling ice to an eskimo.
    There is no rational person that would ever willingly give up the fortune they've made in taxes if they can help it.
    You over-estimate how far you can push people.'


    Take yourself off down to Vodafone, hand out some leaflets to passers by and note their response. You'll see that the public can only be pushed so far, and that far has now been reached. When you inform ordinary people just how unfair it is, just how much they've been ripped off they join you in your protest! http://www.redpepper.org.uk/topshop-and-the-solidarity-of-the-ordinary-shopper/

    The technical term is known as 'blowback' in the US.


  • Comment number 83.

    60. At 14:26pm on 20th Dec 2010, VinChainSaw wrote:

    "56. At 14:19pm on 20th Dec 2010, spikegifted wrote:

    Exactly my point. Its not as if the UK is currently producing any other star industries that could even come close to the dmoinance of the city."

    Surely only a banker uses a phrase such as 'star industries'

    Seeing as banking is such a cornerstone of our economy - then why hasn't it earnt the money to repair the damage it did?

    Could it be because it can't make any money without us working? (parasite)

    Come on VinChainSaw - we need some logical answers. Why hasn't the banking system dug us out of this hole already?

  • Comment number 84.

    "57. At 14:20pm on 20th Dec 2010, TonyH wrote:
    33. At 13:11pm on 20th Dec 2010, writingsonthewall wrote:
    24. At 12:48pm on 20th Dec 2010, rbs_temp wrote:

    >No it doesn't - I find it hillarious that the sheeple of Britain are finding out the true cost of private sector bean counting....and doing what they always do best - moan about it.

    ==================================================

    Please don't refer to your fellow man/woman as 'sheepie' - It's bad manners.

    How would you feel if someone referred to you as 'Knucklehead'?"

    Well said. There are a lot of people on this blog in both camps who are way too patronising. Treat each other with a bit of respect even if you don't agree with each other.

    Happy Christmas to all.

  • Comment number 85.

    Re #69

    'The largest security threat to any operation are the employees, whether that is in banking, or indeed, even those robbing the bank who fear either a 'plant' or someone with a big mouth!'

    And that is why the banks rid themselves of competent risk managers and why some bank-loving-governments really don't like wikileaks or Assange. The blabbers are dangerous to those with something to hide.

    Come on Julian. We have the dirt on US plans for Venezuela now, so can we have the dirt on the banks now?

  • Comment number 86.

    68. At 14:32pm on 20th Dec 2010, Dale_Lemma wrote:

    "re travel chaos (a bit off topic, but as usual WOTW has written more than Robert so his rant becomes the topic)."

    Always complaining aren't you? You must have a real issue with free speech.

    "This is how the centrally planned economy of China coped with uncommon weather (as in worst in decades).

    http://news.bbc.co.uk/1/hi/world/asia-pacific/7214562.stm

    Was the weather worse - probably. Was the disruption worse - yes."

    Is that it? - your best effort? Well there was some bad weather in rural China (where they barely have roads) and there was disruption - and that's comparable to the airports in London closing?
    I don't see any mention of Beijing airport being closed for 2 days in that report.

    "PS You get bean-counters in government too. Hopefully we can all agree on this. Labour isn't infinite. Somebody has to decide where to apply it. Decisions are made by humans and most of make mistakes."

    No - private sector enterprise prides itself on it's 'efficiency' - to the point where Governments believe it's the best vehicle to deliver services. However this has consequences and one of them is that our major (proivately run) airports don't have enough snow equipment to keep them open.

    Still - I suppose when you're clutching at straws....

    Please stick to the topic - you'll find you'll have more success rather than trying to 'demonstrate' whatever it was you were failing to demonstrate with that link.

  • Comment number 87.

    70. At 14:42pm on 20th Dec 2010, VinChainSaw wrote:

    "There is no rational person that would ever willingly give up the fortune they've made in taxes if they can help it."

    Really?????

    http://money.cnn.com/2006/06/25/magazines/fortune/charity1.fortune/

  • Comment number 88.

    72. At 14:46pm on 20th Dec 2010, M_T_Wallet wrote:

    22. At 12:47pm on 20th Dec 2010, NorthSeaHalibut wrote:
    #15. At 11:57am on 20th Dec 2010, RedHairedGirl wrote:

    There's one in January and a big TUC one on 26th March - please attend both if you can - and bring your friends and family.

    Lets strike a fear into the heart of the establishment which conspires to defraud us.

  • Comment number 89.

    55. At 14:17pm on 20th Dec 2010, VinChainSaw wrote:
    51. At 14:09pm on 20th Dec 2010, TonyH wrote:

    > Just to clarify - I dont like what they're doing, but I like what some on this forum (including you) are proposing even less.
    Chasing the banksters away will make our problems much, much worse.

    ===================================================

    To be clear, what I am suggesting is that bankers accept responsibility for their actions. They could demonstrate this by declining bonuses. After all, they are well-paid and such a gesture would demonstrate that they are socially responsible people.

    If they do not, taxpayers will quite rightly condemn them as being greedy and grasping individuals who choose to place themselves beyond society. That is not a good long-term strategy to adopt.

    One thing is certain. The gravy-train has reached the end of the track and the passengers need to get accustomed to walking.

  • Comment number 90.

    copperDolomite - yes, clearly it relies on IT staff. Not sure what your point is.

    writingsonthewall

    Not sure what bond market errors have to do with finding a property in Canary Wharf. Face it, they have spent 2 years looking for accommodation. This will include network bandwidth, insurance, employee surveys etc. You just glibly say they could save in Vauxhall. Do you really think that comes across as adult?

    "No - you are uninformed - the US Government can't make it's military secrets safe from hackers"

    The guy logged into a server then wrote it to a CD. He said it was really easy. This is a different story to recording an encrypted conversation over a dedicated network. The US and UK will have private lines to one another, they don't use Gmail.

    "What sort of excuse for a man are you? First sign of trouble and you're running to our kidnappers and telling them how much you've always admired them!"

    I'm not sure why you said the last paragraph or so?

    "What sort of excuse for a man are you? First sign of trouble and you're running to our kidnappers and telling them how much you've always admired them!"

    Yes - they are reading all this and will let me off when they take over the world formally.

    "P.s. Apologies for destroying your image of skype and it's invincibility - maybe you shoudl start unplugging all of those wires..."

    Maybe don't make silly statements that you have no proof of or understanding of, then try to defend them solely on a health dollop of abuse and some weird disconnected rant at the end.

  • Comment number 91.

    44. At 13:51pm on 20th Dec 2010, Ben wrote:

    mark_savill - good post. The same electorate that vote for spending increases election after election. Simpler to blame one part of the problem.
    ==================
    Ben, Not having a go, as a lot of what you write about economics makes sense and is well-informed. Thanks.

    But I have lived through a lot of elections, and have never voted for "the moon on a stick". The general dis-enfranchisement of the electorate is well documented. Actually, most of the people I know vote out of habit, or for an ideology or against corruption. One friend, a lifetime labour voter, changed his views at the last election...and admitted he was surprised to find himself doing so, but could no longer support what the party stood for. I think you'll find that the "landslide victories" of the last 20 years were won on a turnout of less than 40% of the electorate, and a great deal of gerrymandering. At the last election, the labour party overtly courted the Islamic vote in order to get a significant swing.

    I do not think that there has been an overwhelming mandate for any UK government as far back as I can remember. When Mrs Thatcher came to power in the 1970's there was a general feeling of relief that someone had stood up who had the vision to address the stagflation that was then the big bogey word. But the electorate was polarised into left/right by industry sector even then.
    ~~~~~~~~~~~~~~~~~~
    I'm not supporting the bankers in these comments, but why bother to have so many posts that are so childish? Get rid of all banks, hacking etc. Posts today are really poor.
    =====================
    Agreed. People are angry , and therefore somewhat incoherent.
    ~~~~~~~~~~~~~~~~~
    RedHairedGirl - spot on about people with 12 mortgages. This is one of the main causes of the problem. We are all spending vast amounts of our income on keeping a roof over our heads and in debt up to the eyeballs on it, and much of the money "made" off the back of this has been spent on unproductive assets.
    ===================
    Agreed with redhairedgirl also, and did I hear recently that Cameroon and co are property millionaires?

    But...as discussed before, most of the money "made" off the back of this has been creamed off the create-spend-destroy cycle and pocketed by the financial services industry (pensions, insurance and loans.) After all, where else do they get these "bonuses" but from your and my "9-5 treadmill" where we work to pay the interest/premium and they trouser the interest?

    PS. As I mentioned a couple of days ago, he who pays the piper calls the tune.

    1. If government is funded by taxation, the government is beholden to the taxpayer.

    2. But if government is funded by borrowing, the government is beholden to the banks.

    Given the size of the deficit, I suspect that point 2. is a stronger lever than point 1.

    @@@@@@@@@@@@@
    If anyone can give national average figures for the following, I would be interested.

    In total...when you go to work, your company pays 50% of your costs to you as salary and the rest goes staight to the government. The government then gives a large % of that to the banks as interest payments on the accumulated national debt.

    When you take your 50% home, you then spend on average 50% of that on council tax, interest payments, insurance premiums, fuel duty etc.and if you're lucky, pension contributions. (Not everybody has them, you know).

    So before you have even taken your pound to the shops, 75p has gone to the finance industry. Doesn't this strike you as wrong?

    The MMT people here say that taxation could be used to destroy money to keep demand and supply in balance. But as it stands at the moment, that is not what happens. Instead, taxation funds the surplus in the financial services industry...which is being handed out in bonuses to people who have no intention of consuming it...they would rather "re-invest for a return above inflation".

    Oh, and the sign on my hat says 12/6D
    :)

  • Comment number 92.

    71. Payguy

    I agree with many of your sentiments. It's an odd situation when so may people are hacked off and yet it feels like no real progress has been made yet.

    Personally I prefer a gradual change to a rapid one. Slowly squeezing the industry until it becomes ordinary (boring), allowing us to redeploy labour more effectively. Unlike some here, I think there are some talented people in banks. I mean they employ hundreds of thousands of people, some have to be pretty good - just doing the wrong thing.

    Finally, you asked what is the difference between banking (you don't say what kind of banking) and Madoff. As I understand it, what Madoff did was illegal. Most of what banks did/do is not against the law (yet).

  • Comment number 93.

    73. At 14:48pm on 20th Dec 2010, 4FoxAche wrote:

    "And let's not forget that without these people taking the loans out and taking the risks with their own hard-earned cash to fund their businesses, you wouldn't have a place to work or a place to take a (dodgy) shower."

    ...and lets not forget who bails these clowns out when they go bust.....ah that will be the taxpayer then.
    I mean do you know what happens when a house gets run down because the landlord has folded? - the council have to compulsury purchase it so it doesn't look messy.....or maybe landlords running limited companies where we all pick up the tab - or maybe those who simply declare bankruptcy and walk away from their debts - yes, certainly an isolated 'casue and effect' there!

    "All may not be well with the world, but we would be better off pointing the finger at the right people rather than randomly"

    It's not randomly - clearly you have a vested interest to defend - unless of course you simply enjoy renting.

    I've worked in this game and it's the most crooked going - crooked banks, crooked mortgage advisors, crooked estate agents and crooked landlords - no surprise as 'easy money' always attracts the crooked types.

  • Comment number 94.

    74. At 14:48pm on 20th Dec 2010, warwick wrote:

    Nice. Thankyou.

  • Comment number 95.

    Our greedy ruling elite/financiers are going to find out very soon just how fed up people are. As to the 'sheeple' debate - if people swallow every lie that is fed to them about how this economic crisis came about then they deserve to be called 'sheeple'.
    We are being fed an economic myth by Govt and the finance industry, too many people are falling for it. Time to wake up! I guarantee you that bonuses will be paid as if the last 2 years never happened.

  • Comment number 96.

    Taxing the banks and the 'bankers' is just a quick, populist, knee-jerk reaction to 'public anger'. At best, a messy way to cover up the complete lack of progress in reforming both the regulation and functioning of banks and other financial institutions on a global scale. At worst, it is slowly killing off the most viable industry of this country.

    ------------------------------------------------------------------------------

    At least there are some people still talking sense on this board. Watch out though spikegifted, there will be a mob branding pitchforks outside your house shortly!!!

  • Comment number 97.

    70. At 14:42pm on 20th Dec 2010, VinChainSaw wrote:

    "You over-estimate how far you can push people."

    ...like the politicans over-estimated how far they could push the students?

    Lets see how far the rest of the sheeple like being pushed in the new year when they're hit with massive increase in their budgets to pay for all the devalued currency and the commodity speculation.

  • Comment number 98.

    90. At 15:20pm on 20th Dec 2010, Ben wrote:

    Not tech savvy then.
    The clue was in the word 'record'.

    See, once it is recorded it can be copied to Youtube, wikileaks or whatever and then a little twitter or two later guess what? It's on BBC, Al Jazeera, featuring in the Guardian, Private Eye will have whoops of fun....

  • Comment number 99.

    90. At 15:20pm on 20th Dec 2010, Ben wrote:

    "Not sure what bond market errors have to do with finding a property in Canary Wharf. Face it, they have spent 2 years looking for accommodation. This will include network bandwidth, insurance, employee surveys etc. You just glibly say they could save in Vauxhall. Do you really think that comes across as adult?"

    Do you think your assumption that 'they know what they're doing' is any more adult? I mean I tend to not trust those who have made idiot mistakes in the past so quickly - but you seem to have a blind spot when it comes to this.
    My point is that for the amount they paid to be in Canary Wharf (which is all about prestige my dear) they could have owned half of Vauxhall - my subtle (clearly too subtle for you) point was that there is a commercial property collapse imminent in London and there is lots of choice around.
    I couldn't care less if they moved to Canary wharf of Canary land. Companies that make bad choices and aren't made to learn from those bad choices (bailout) will make them again.

    "The guy logged into a server then wrote it to a CD. He said it was really easy. This is a different story to recording an encrypted conversation over a dedicated network. The US and UK will have private lines to one another, they don't use Gmail."

    Really? - well that shows how little you know about Government internet security. Lets not get into an argument about something I know intimitely and which you are taking from the corporations which sold you the 'unbreakable encryption'.

    "Yes - they are reading all this and will let me off when they take over the world formally."

    Ok then - just like all those other Rasputin types throughout history...

    "Maybe don't make silly statements that you have no proof of or understanding of, then try to defend them solely on a health dollop of abuse and some weird disconnected rant at the end."

    Maybe the diconnection was your skype being hacked. If you remember you started this 'silly' conversation by arguing about the ability of the Government to hold a video conference call or not. I stated - as I understand to be the case...that Governments don't really do many conference calls for security fears and that with the recent wikileaks they're probably not going to risk it.

    Are you saying that not a sane and rational reason? - or do you still think skyps is impeneterable?

  • Comment number 100.

    81. At 15:05pm on 20th Dec 2010, writingsonthewall wrote:
    57. At 14:20pm on 20th Dec 2010, TonyH wrote:

    "Please don't refer to your fellow man/woman as 'sheepie' - It's bad manners.

    How would you feel if someone referred to you as 'Knucklehead'?"

    > Well if I acted like one then I would deserve it - if people act like sheep then they will be called sheeple.

    ===================================================

    In the spirit of Xmas, I am going to resist this opportunity to award you the proposed sobriquet.

    You will continue to be WOTW.

    Who knows, you may be visited by a few ghosts shortly. Perhaps they will be able to show you the error of your ways!

    Anyway, enjoy the break - you seem to be in meed of it!

 

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