UK bankers fume over bonus levy, others welcome it

 @ibtimes on December 09 2009 6:56 PM

Angry London bankers and traders accused finance minister Alistair Darling on Wednesday of lip service to appease the poor with a levy on bank bonuses.

However, public sector workers, who face a wage curb as Britain struggles to rein a record deficit, welcomed the move, saying those they blame for the financial crisis should pay.

In his pre-budget report Darling said a 50 percent levy would be taken from banks paying bonuses of over 25,000 pounds ($40,840) and should bring in 550 million pounds that the state would use toward helping the unemployed.

This figure (550 million pounds) is a drop in the ocean and it will not make a difference toward job creation. Ahead of an election, Darling is paying lip service to the poor to show them Labour cares, said a 53-year-old financial trader who did not want to be named.

Another trader outside the London Stock Exchange said the financial sector was being made a scapegoat.

We are not surprised by this announcement, instead of focusing on the shortcomings in government policies he chose to target the banking sector, he said.

However, workers in public services said it was justified.

The levy is completely legitimate. The country needs the money and instead of raising everyone's income taxes the sector responsible for the financial crisis should bear the consequences, said Harris Gordon, a 32-year-old teacher.

Sarah Fine, 22, a community police officer, said creating more jobs would reduce crime and have an overall positive effect on society.

The bosses in the banks are overpaid and they just make up a handful of people in society. Rising unemployment has seen an increase in crime and this needs to be reversed, she said.

The average annual salary in Britain is around 25,000 pounds. Finance minister Darling said public sector pay increases would be capped at one percent in 2011 and 2012.

Some bankers said that the bonuses were deserved because of the long hours they worked in a high-pressure environment.

What ordinary people don't understand is the length recipients in the banking sector have to go to in order to qualify for those bonuses, said a 48-year-old banker.

The big question is whether the banks will compromise on attracting and encouraging the best in this industry and in this city, he added. ($1=.6121 Pound) (Reporting by Peroshni Govender; Editing by Keith Weir and Simon Jessop)

Join the Discussion