Cable threatens to use tax to bring the banks to heel on bonuses.
The Liberal Democrats are, at last, showing that they can have an influence whilst in a coalition government.
That's the kind of talk we want to hear from the Liberal Democrats. When they say what we are all thinking and also saying something which no Tory would ever utter in a month of Sundays.Banks will be punished with higher taxes if they award huge bonuses in the next few months, Liberal Democrat ministers warned yesterday.
Today Vince Cable, the Business Secretary, will float the idea of giving shareholders more power to curb excessive pay packages for all company bosses.
Yesterday's sabre-rattling suggests that the Coalition may extend the one-off 50 per cent tax on bank bonuses of more than £25,000 announced by the previous government last December. That would cause anguish in the City of London, and provoke renewed warnings of an exodus of firms.
Before leaving the Liberal Democrat conference to attend a United Nations poverty summit in New York, Nick Clegg said ministers would not stand "idly by" if banks handed out "unjustified" bonuses.
The Deputy Prime Minister told BBC Radio 4: "I think it would be not in their interests at all, socially or economically, for them to be starting to award themselves [big bonuses]."
Mr Clegg went on: "It is very important that the banks understand that you cannot possibly award yourself ludicrous sky-high bonuses in an industry that has been bailed out by the taxpayer when those same taxpayers are now having to make very serious sacrifices in their own lives... that will appear almost gratuitously offensive."
This is the first time that I have ever felt that the Liberal Democrats are holding back the worst of Tory excesses and forcing them curb the greed that seems to define them and their supporters.
It is, as Clegg rightly states, "gratuitously offensive" for bankers to be offering themselves huge bonuses at the very moment when Britain's poorest citizens are facing huge cuts in welfare brought about by these same bankers greed.
I don't think there is a single citizen, other than those that work in the city of London, who would disagree with what Cable and Clegg are saying.Mr Cable warned bankers that they would face a "train crash" if they award themselves huge bonuses, but admitted that the Government was braced for a public and political outcry over the next round of handouts.
The Business Secretary warned: "I don't think the banking community should assume that the Government doesn't have any potential sanctions, because it does."
He said regulation could be used to ensure disclosure of bonuses and added: "Potentially there are quite tough sanctions in terms of tax policy." If banks showed they had lots of money to spread around in dividends and bonuses, "then the Government may have to use some form of taxation to change their behaviour". That could mean an increased tax on profits, or looking at a tax on financial transactions – although the latter would almost certainly only be done as part of an international agreement.
It was the bailout of the banking sector which led to the crisis we currently face. They cannot award themselves huge bonuses whilst the rest of the country faces cuts of between 25 and 40%.
That would be an obscenity. And Cable and Clegg are to be applauded for pointing that out.
This is the first time that I have seen a meaningful reason for the Liberal Democrats to be a part of this coalition.
Click here for full article.
No comments:
Post a Comment