It’s time to get tough on the City
Chuka is a signatory to this letter, along with former Mayor of London Ken Livingstone and others, which appears in today’s Guardian newspaper:
Despite the government saving the financial sector from meltdown, City reaction to the PBR has been to promote scare stories of a so-called mass exodus of “talent”, questionable accusations from leading accountancy firms of a huge black hole in the public finances and, worst of all, plans to engage in tax avoidance in relation to the new windfall levy on bonuses (City tells Darling: you’re driving us out of Britain, 10 December).
Let’s not forget that it was the bankers who wrecked the economy in the first place and that we face a budget deficit that they significantly helped create – not least in part by the banks bailout. Let’s not forget too that despite the bailout, before the PBR, banks planned bumper bonuses forecast to rise 50% to £6bn. It’s in this context we feel the government deserves support in imposing the windfall levy on bonuses. We further welcome government efforts in advocating a financial transactions tax. These measures are important in making the financial sector as a whole more socially responsible.
We’d also urge the government to take radical steps in diversifying the economy and end the country’s overreliance on financial services for jobs, growth and tax revenue. Further, we don’t believe that public sector workers should be forced to pay for the mistakes of bankers through a real-terms pay cut. On the wider issue of excessive pay – while a bonuses windfall tax is good for the short-term, for the long-term we’d call on the government to establish a high pay commission.
