Lib Dems: Smaller bonuses, smaller City?
Nick Clegg's latest policy, clamping down on bankers' bonuses, is vintage Vince Cable. It's a vice to the vitals of investment bankers and those running our biggest banks.
These are the highlights:
1) All bonuses over £2,500 would be payable in shares, which couldn't be redeemed, or pledged as security for loans or turned into anything spendable for at least five years.
2) No one on the board of a bank, not even the chief executive, would be eligible for a penny of bonus.
3) Loss-making banks would be banned from paying bonuses.
4) Every employee of a bank earning more than the prime minister - which Mr Clegg defines as circa £200,000 - would be publicly named.
5) Bank directors would be fined if their banks were to break the remuneration code.
What to say about this? Chances are that, were the C&C pay code implemented, it would be a pretty fast route to a smaller British-based banking sector, a smaller City - as bankers and banks would doubtless make a panicky run to a more benign tax climate.
C&C would probably say "good riddance to bad risks".
And they would say that the bonus jihad is just a stepping stone to a structural reform of the banking system: the break-up of banks and the stimulation of competition to eliminate what they see as the excess profits that generate the bonuses.
C&C talk about this with total moral and economic certainty. Unlike Labour and the Tories, they have reached a settled position that the tax revenues and employment generated by a bulging City are inadequate reward for the risks to the stability of the economy and to social cohesion from a vast financial industry built on debt, speculation and substantial bonuses.
Anyway, to state the obvious, it'll be an unusual investment banker who votes Lib Dem in the coming election.
More generally in the City, the C&C pay policy will be dismissed as the extremist grandstanding of a party with no chance of winning power.
But that would be a bit naive. Vince Cable's voice has been louder than any other British politician's since the Crunch became full-scale banking crisis. Where he leads, Labour and the Tories do not slavishly follow. But nor do they ignore him.
At the very least, if C&C have opted for a hairshirt, fundamentalist bonus prohibition, no banker should expect that the general political and popular attitude to their wonga will become markedly more benign any time soon.