The Centre for Economics and Business Research forecasts that this year City bonuses will be down to £2.3 billion. This contrasts with their peak of £11.5 billion in 2007-8, and with £7.3 billion in the last Labour year.
The Coalition can show that on their watch the problem of City bonuses has been well and truly tamed. The UK is in this way now a more equal society. As CEBR point out, it also means a big reduction in tax revenue, (more than £4 billion) so we can now afford less public service.
So I would like to know, are people today much happier because City bonuses are likely to be down by 80% on peak levels? What benefits should we now expect from this development? How should we replace the lost tax revenue? Should the government now claim victory and move on, or should we expect them to remove more of these bonuses?
I do think the government should offer a lead on linking pay for top executives clearly to performance. Rewards should go for returning a bank in receipt of state shareholdings and subsidy in whole or parts to the private sector, getting taxpayers money back and generating susbstial cash profits to reward shareholders. Shareholders have been without dividends now for a long time, and should have priority.