Lib Dems: City bonuses ‘wildly’ excessive
Liberal Democrat leader Nick Clegg has lambasted many city bonuses as “wildly in excess of corporate risk taking” and called on greater regulation of the City to ensure rewards are more in line with the “political context” in which they take place.
Speaking at the unveiling of the Lib Dem’s new policies for London’s financial centre, entitled ‘A New Deal for the City’, Mr Clegg and Vince Cable – the Lib Dem’s economics spokesman – also stated they would refuse to bail out failing banks if they were in power.
“We have the worst of both worlds,” Mr Clegg told politics.co.uk. “Banks are free to make profits and government nationalises the risks and losses.”
The party claims it would let banks to adopt risky business practises but also allow them to fail, subject to a regulated depositor protection scheme, if things did not turn out well.
The party also announced policies designed to help those in danger of having their homes repossessed, saying “the industry should share the pain”. Mr Clegg called on courts to reject repossessions unless “all reasonable alternatives were exhausted” and independent financial advice had been sought.
Mr Clegg unveiled the Lib Dem policy on ‘non-doms’ at the conference, rejecting Conservative and Labour policies as a flat-tax which penalises modest non-doms but barely touches the super rich. The party are calling for a seven year period of non-domicile status, after which individuals would need to pay tax on their global income in line with normal UK citizens or decide to leave.
The call for greater regulation of City bonuses follows the news that BA boss Willie Walsh may receive his own substantial bonus despite the Terminal Five fiasco, which left travellers and luggage stranded for days.
“There is a need for reform in the City to stop entrepreneurs’ natural animal spirits creating a culture of greed and gambling,” Mr Clegg said.
He is calling for shareholder scrutiny of city bonuses to be strengthened so that shareholder approval becomes a necessary precondition of the bonus being granted.
