City bonuses

An ICM poll conducted for the Sunday Telegraph reveals that 73 per cent of respondents believe that City bonuses are excessive. 

Just last week, Northern Ireland Secretary, Peter Hain, was saying the same thing, even going so far as to suggest that City employees donate two-thirds of their bonuses to charity.

The Sunday Telegraph editorial notes the 73 per cent level of unhappiness amongst those surveyed in the poll, and hints darkly that City employees might like to become more generous with their high earnings before the Government acts to seize some of it through higher taxation.

Maybe, but would Uncle Gordon really dare to slap higher taxes on what Leftwing politicians call 'obscene' bonuses? The Fisherman thinks he wouldn't dare. There have already been hints from a few places that some businesses are being tempted to relocate their head offices from London to more tax-favourable capitals in Europe. A further tax on bonuses could just edge some of the more unhappy firms out the door.

Also, Uncle Gordon is a bit preoccupied right now with trying to become the Prime Minister. He would conclude (rightly) that such a move would cause panic in the business world.

On top of that, he began a few months ago to make overtures to the financial sector (see here, here and here). He knows that he cannot afford to alienate them. The Fisherman concludes that large bonuses are safe for now. However, no-one knows what will happen after Uncle Gordon has been in charge of the country for even two years. We will almost certainly return to this topic in due course.