Events | 2009.12.08
Letters: Levelling the bankers' bonuses
Peter Preston ( The rewards of banking , 7 December) has a point: bankers are human too. Most of them want exactly the same as us: a decent quality of life. But bankers are not islands: they have to deal with (or are inconvenienced by having to avoid) the same challenges and problems in society that we all face. In fact the huge salaries paid – and the beauty-contest "I\'m worth it" factor that perpetuates these salary levels – actually make the situation worse: bankers, along with the rest of us, struggle to keep up.
As Richard Wilkinson and Kate Pickett\'s book The Spirit Level makes clear, the negative effects of income inequality are not confined to the poor. On the flip side, the vast majority of the population do better in more equal societies. People with good incomes will be likely to live longer, enjoy better health, and will be less likely to suffer violence than those in a more unequal society. Their children will do better in school, will be less likely to take drugs and less likely to become teenage parents. Although the benefits of greater equality are bigger lower down the social ladder, they are still apparent even among the well-off; the majority of bankers included.
While there is a strong moral and financial case for bashing bankers\' unfair bonuses, there is also another argument we should be making, which might be more persuasive to those who would be directly affected. For it is in their own self-interest not to fuel greater income inequality. Instead, we should be looking at ways of more fairly sharing the responsibilities of being in "one society".
Malcolm Clark
Campaign director, One Society
• As one who has long backed a Tobin tax on currency speculation, I welcome the article by Stephany Griffith-Jones ( Now let\'s tax transactions , 8 December) but wonder if the times have changed so much that merely taxing one relatively small number of transactions has become too timid a response to the recession and crisis caused by antisocial financial activity. A small levy on currency speculation would deter some socially useless trading and raise, as she says, about $30bn a year. However, an authoritative Austrian study estimates that a 0.05% tax on all financial transactions would raise about $700bn a year. Dividing its proceeds between public goods at home and abroad would be much more attractive. The need for such a tax has been under the radar for many years but is now seen as a feasible and popular response. I am very pleased that Adair Turner and the prime minister have assisted this and I hope that this idea is adopted urgently.
Lab, Blaydon
• One could hardly argue with Alison Gill and Mannie Sher\'s point ( Letters , 4 December) that those who take risks should also get the rewards. However, investment bankers do not take risks, they create and manage them for other people – shareholders, depositors and customers. It\'s not their money they are risking but ours, so their bonuses are tantamount to theft. The tragedy is that they have conned governments and other decision-makers into accepting this heads-they-win-tails-we-lose matrix as being the natural order of things.
Alan Dale
Brighton
• Rather than a windfall tax on bank bonuses ( City bonuses under threat of windfall tax , 7 December) a simpler solution, as suggested by Billy Bragg ( Comment , 20 February) is to reintroduce a surtax on earnings above a specified level. This would help to create a much more equitable society and go some way to prevent some of the many social harms linked to high levels of inequality.
Paddy Hillyard
Belfast
• Super-taxing of bonuses ( Editorial , 4 December) deals with symptoms, not causes. Could someone analyse the activities from which the 5,000 £1m bonuses are derived? How many are derived from: fund managers charging obscured and excessive charges on fund holders; trading in government bonds without any extraordinary risk; bonus schemes which handsomely reward everyday, unexceptional effort; activities that enjoy a degree of monopoly power and are effectively underwritten by the government?
John Pickering
Labour Finance and Industry Group
For more information, please visit
http://www.guardian.co.uk/business/2009/[...]budget-report-bank-bonuses-tax
