Rage as ‘greedy bankers’ take bonuses
Despite widespread blame for our economic woes and a renewed outbreak of banker bashing, top financiers are due for another bumper year.
This week the big UK banks are disclosing the bonuses that are they paying their bosses. Bob Diamond, the head of Barclays, is eligible for £8m. Stephen Hester, the head of the Royal Bank of Scotland, is in line for £2.5m. Total payments to bank staff this year will reach £7 billion.
Indignation and rage is spreading through the country.
Fuelling the rage are three main factors. One is the view that bank bosses are just plain greedy. Does anyone deserve to be paid roughly 80 times the average UK salary of £27,000 a year? On what can anyone possibly spend £50,000 a week?
Second, is the view that the banks are responsible for the global economic crisis and that the crisis is the reason that the UK has got to face years of austerity during which many will become poorer, some will lose their jobs and almost all will feel the pain of cutbacks in government services.
Finally, there is a feeling that our political leaders are not standing up to the banks. David Cameron’s spokesman just made a statement that has been widely interpreted as throwing in the towel. While the Government wanted restraint, he said: "We are not going to set bonus pools for individual banks. We are not going to set pay policy for individual members of staff.”
Cameron’s deputy, the Lib-Dem leader Nick Clegg, was vehement about the need to curb bank spending before the election. Yesterday he appeared to defend the banks, saying: “We've got to acknowledge that we need a healthy banking system for a healthy economy”.
The government's apparent climb-down has infuriated the former Labour chancellor Alistair Darling. Attacked while he was in power for his failure to tackle banks, Darling said yesterday: "The government has made a lot of noise but it hasn't actually done anything. They are increasingly seen as empty vessels."
Top bankers, meanwhile, are not giving in. Under pressure they threaten to base their banks outside the UK legal system, costing the country hundreds of billions of tax. They point out that many other successful business leaders are paid millions – why pick on them? They explain that the banks were not ‘responsible’ for the global crisis; the whole free market system was – and that includes governments and ordinary people. Above all, they say the banks actually do a lot of good and we are foolish to bash them.
- Which jobs do you think should be most highly paid?
- What are the good things that banks do, in your opinion?
- Imagine a banker and a nurse meeting in a lift or at the bus stop. How does the conversation go as each of them talks about what they earn?
- Bob Diamond, the CEO of Barclays Bank, has been offered a bonus of £8 million. Should he accept it? Write a letter to him, saying what you think he should do.
Some People Say...
“Banks should be abolished”
What do you think?
Q & A
- Why do bankers get such huge bonuses?
- Because they are themselves dealing in such huge amounts and making such enormous profits for their companies. For example if someone makes £100million for a company due to their talent and hard work, it makes sense for the company to give them £1million. Just like if someone earns you £100, it would not hurt to give them £1 as a "thank you". In reality, however, it is extremely difficult to decide how much an individual has contributed or deserves.
- Why can't we simply make bonuses over a certain amount illegal?
- Because banks would move their headquarters to other countries where they are not illegal. If that happened they would no longer pay taxes in this country. That might mean that for the sake of stopping some personal gain to bankers, the whole country lost many millions of tax revenue that might have helped fund our schools and hospitals.
- What sort of good things do banks claim they do?
- They say that they lend money to people to do things they otherwise wouldn't be able to do; that they make life much simpler by looking after people's finances; that they keep all our market systems effective; and that they sponsor and support many worthwhile causes and charities.