Osborne threatens to inject bank bonuses into businesses

Being a banker must be difficult at the moment. Gazing out of the tinted window of their Mercedes S-Class as they are chauffeur-driven to the glass-and-steel atrium they call an office, bankers must linger for an instant on a time, 12 months ago, when life seemed happier. Simpler.

Back then, people may have been throwing bricks through the front windows of bank execs – but at least the other rich people were on their side. Politicians were still relatively sympathetic, celebrities had little to say and royalty were downright vocal on the issue – the Duke of York even told the Telegraph bankers’ bonuses were ‘minute’ in the scheme of things.

Now, though, all that has changed. Even the Tories are against them. Following Boris Johnson’s condemnation last week, in characteristic outraged style, of bankers’ ‘barefaced greed’, shadow chancellor George Osborne yesterday put forward plans to hijack high street bankers’ bonuses, proposing to channel them instead into small businesses, which have yet to see much of a recovery in lending.

“This is still a credit crunch, and it would be inexcusable for banks to pay out big bonuses to their staff, when there are so many businesses that need that cash,” he told GMTV viewers yesterday morning.
“That cash, if it’s available, should be lent out to small businesses... and for the people working in companies who are lacking credit at the moment, because we’ve got to keep people in work.”

The idea has drawn criticism from opponents, most notably chief secretary to the treasury Liam Byrne, who frothed at the mouth a bit as he argued the Conservatives have ‘fought against every plan we’ve delivered to support jobs and businesses’.

“Mr Osborne’s hypocrisy beggars belief,” he raged.

We’ll leave the last word, though, to one of Smarta’s favourite shadow chancellors, Vince Cable; whose response was somewhat more level-headed. “The Tories have been deeply ambivalent on the much more fundamental question of what we do about the future of the banking system,” he pointed out.

“These bonus proposals are short-term, stop-gap solutions designed to stem public anger but which fail to get to the heart of the problem.”

  • Following a couple of probing – and very contrasting – entrepreneur interviews on Radio4’s Today Programme, Smarta has been very much enjoying trying to work out if its approach to business is more Buffet or 50Cent. Find out which approach is more you at the Today Programme's website.
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