Keeping the financial sector in Britain

In2minds

@Ted Sumpster - "There are several ways to improve the situation. The Government could" -

Leave the EU and set its own own policy as opposed to stay and comply with what Germany wants; you forgot to mention that.

Chazzer

Someone needs to stand up for the bankers, and this chap is making a good start

Silent Hunter

Or in other words...

i) Commit to something that we all know will never happen so that we can preserve the status quo and our Big Fat Bonuses.

ii) Stop people rightly demanding to know why the ejits who caused the whole financial crises should STILL be paying themselves their Big Fat Bonuses.

iii) Let us keep more of our ill gotten gains by taxing everyone else instead of us.

God preserve us from self serving venal bankers.

Frankly the sooner these bozo's leave for another country the better it will be for all of us . . . and whom do the think will want these fiscal failures, I don't see people falling over themselves to employ the idiots who got us into such a big mess through their own greed.

The sooner we learn that the Banks are only interested in their own profits . . . at the expense of everything else - & I mean EVERYTHING - they caused the depression in America in the 1930's and all the subsequent financial crises we have had to live with and are not averse to manufacturing wars if required to protect their income.

In short Banks should not run our lives for us - we DON'T vote for them, so why do they presume to dictate to us?

As for "striking the right balance" . . . What a transparent attempt to rehabilitate the greedy bankers.

Begone! . . . and take your rabble of overpaid, heartless non entities with you.

Noa Zrk

A well made argument for a positive approach to attracting and retaining wealth creators and it's distributor to the UK, as opposed driving it into the arms of our competitors in Frankfurt, New York and the far East.
Brown's 'hate' taxes need to be recognised for what they are, distractions from his own lamentable performance as Chancellor and PM.

Further, the principle of low taxes and incentives for entrepreneurs and businesses needs to be comprehensively extended to encourage economic recovery, growth and wealth creation.

AY

"..The financial services industry.."

Industry my bass. Even wikipedia says there is no such industry.

http://en.wikipedia.org/wiki/Industry

They are not doing anything useful, neither intellectually not practically.
They are parasytes.

TomTom

Surely the Puppet Masters simply need to tell their marionettes what they want and it will be done ? Sovereign states exist only to serve bankers and we are all Serfs born to be shackled to the Debt Moloch. The banks will be the only surviving businesses in Britain, having liquidated every non-financial company and household.

Bankers are the new Overlords with their boots on the throats of the population

TrevorsDen

If billions are being given in bonuses - just in bonuses, then even more billions are being earned by the banks.

Leaving aside the taxes or otherwise on these profits - just where have all these billions come from ?
Never mind taxing them - what is the use of them what good have they done.

If, in the casino that is modern banking, the house always wins then who are the losers? Who is walking round with empty pockets.
Call me old fashioned but somewhere along the line WE are all poorer as a result of the activities of these barrow boys.

lola

I really do not see why the FS sector should be a special case. I mean the government has wrecked all other sectors of British wealth creating private business over the last 100 years by relentlessly enacting the diametrically incorrect policies. What makes anyone think they're going to stop that practice now? Remember, the correct policy would see all the political class having to fall on its collective swords. And that's just not going to happen is it? Bring on the revolution.

yank

"Judging the net overall benefit of the financial services sector is not easy, but if the Government is to make informed policy decisions about new taxes and regulations then this is clearly a calculation that needs to be made. At the moment, proper figures simply are not available."

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You give the game away here. If it was a net overall benefit, you'd be trumpeting it from the heavens... because those figures are available, my friend.

Let's avoid the rush, and just say it's not of net overall benefit.

The Public simply needs functional systems for commercial and personal banking. Period. Those should be promoted and supported. Investment banks can take their wares and move offshore if they wish, and no reason to succumb to their special pleadings, as there is no demonstrable net overall benefit to retaining them onshore, as you have failed to demonstrate one.

And they can take their derivatives and credit default swaps and $1,600 per hour Manhattan call girls with them, too. Oh, and they can take their political lobbyists as well.

We'll all be fine.

We need a line of demarcation here, and thousands of miles of open ocean would help establish that, even in the internet age.

Olaf Rye

If the public is so opposed to bonuses in the financial services sector, they ought to lobby their MPs for the government to intercede as shareholders. Otherwise, these companies are free to pay their staff whatever they please. Do remember some banks and some financial institutions did not receive public money and their decision to reward their staff is only limited by their shareholders. Moreover, many of these institutions are legally bound to pay these people something by dint of their contracts. As was stated earlier, if these people are paid a great deal in bonuses the banks have earned more. Now, I am no fan of the banks: they are scarcely representative of an open market and have been coddled by ALL governments for too long. A nice move would be to open our banking sector to competition from abroad. After all, the banks are not lending because of their liquidity problems, so why not invite Chinese banks to operate in the UK ? The worst thing about this debate is that it is primarily driven by envy. The state has absolutely no place to dictate the pay of people in any sector apart from the civil service. If you do not like it, get involved as a shareholder. But we all know that the unions and many others have sunk lots of their investments in the financial institutions and dare not compromise their profitability. The regulation we have for banks is extensive, but it is also bad--after all, the civil servants in the FSA could not see the problem. We should perhaps ask why our civil service is so bloody ignorant and useless.

justathought

Frankly the bankers bonuses are an irrelevance in the wider scheme of high levels of taxation in the UK. It is clear that the banks have not come clean and their political masters dare pressure them to reveal the extent of their insolvency. No sooner was the stress tests published than we had to admit their inadequacy.

We learn that now Obama has confirmed the Bush tax cuts have been 'extended' for another two years, de facto they are permanent !. The payroll tax cuts in the US have also been extended. Meanwhile Europe is groaning under the weight of social welfare provisions that are destroying and diminishing the capacity and pace of recovery. Germany is the exception because of the legacy of tight immigration controls that discouraged an influx of welfare migrants.

The scale of the Labour welfare immigration policy accounts in part for the appalling drop in educational standards, particularly in the inner cities. Schools are crammed with a multitude of children who can barely speak English thanks in part to the failed multi culturalism whereby teachers must pander to political correctness rather than teaching. How is it that with so many graduates we still cannot meet the specialist needs for a skilled workforce?

If the debts of the banks can be detoxified without further government aid then I would happily agree to lowering the top rate for everyone , but would agree a 'statement of intent' would add some clarity. Nevertheless I cannot see how welfare state can remain at the level it is and reduce taxes anytime soon.

One thing is clear is that if Europe cannot get its act together and pool some fiscal union then after the PIIGs have been bailed out, who is going to bail out Germany and France?. If the euro fails then how would that affect the UK? Our best bet is to kick start the recovery by lowering taxes AND the welfare state.

PuppetMaster

What a sad article. Wealth is something that you create or grow. The banks take a percentage off the top, this percentage is growing in leaps and bounds.
Was it only this week that we learnt that if you pay into a private pension the banking industry takes 50% in fees. That's not a percentage off the top, that's half.
I suppose I could talk about the banks role in the housing bubble, the fraud, the capture of the regulators, but what's the point, they've evidently captured a lot of journalists too.
At the end of the day the gulf between the banking cartel and the ordinary man is now so large that this can only be resolved in one way; lots of violence.

Major Plonquer 1

Britain should kick out all the parasite bankers. What do British companies need with venture capital anyway? They have plenty of money - all they need to create the millions of new jobs needed to dig the country out of its hole and sustain its economy.

Screw the bankers. They created all the loose money sloshing around and they gave lots of money away to weak minded morons who couldn't possibly pay it back. Don't blame the politicians, specially that nice Mr Brown, no.

Meanwhile here in Hong Kong your bankers can live a life of purgatory. There's no business here anyway and bankers are not needed. A mere 66% of all global private equity is pouring into China - including British pension funds. And our massive 16% taxes will scare them off anyway.

So what does Britain need bankers for? We in HK are perfectly capable of managing your meagre resources for you. Remember, you don't have any money anyway!

Anyone for jiaozi?

DavidDP

It's funny how when Bob Crow holds the economy to ransom with his idiotic strikes, the Spectator is quick to (rightly condemn) but when the banks to it (after having helped to almost topple the economy), we should just roll over.

Jez

More banks, more bonuses, more gambling with other peoples money, more blackmail, a speed up of Globalisation, more economic / free-load immigration.

That's the down side.

What's the upside of them staying.

There will be some. What are they?

PayDirt

The clincher in this article is "At the moment, proper figures simply are not available". The financial "services" have lost the plot, they have forgotten how to count, how to value an asset and who it belongs to. They are criminals. Go straight to prison without collecting your effing bonus. I want to put my money in a proper bank, not a casino outfit.

Adam Smith

I am always amused by Banker-Bashing. I suspect many of the comments above come from individuals who wouldn’t know a derivative if one hit them on the nose and sleept with their spouse...

Naomi Muse

In the global chess game keeping the financial sector in Britain is essential for the UK. But it is not what the EU partners want for both France and Germany would like to control the sector in the UK too or call it to Germany or France.

The best thing the government can do to protect this tax earning sector is to give some tax breaks which are attractive to the financial sector and to draw real red lines to stop the EU encroaching further on our sovereignty.

Although we have been over reliant on the financial sector as a nation, it is stupid to throw it away, and the government must also make it attractive for us to build other business sectors so that we have a good basket of industries to keep the economy bubbling along.

AF

It's worth taking on these bankers and see whats left after the dust has settled.
It may not be that easy for them to up sticks and move,many will have families to uproot(kids schools,wifes career or social circle,)many will have to give this a lot of concideration.They still see this as a good country to live in,and there's definitely a lot worse and unknown out there.
Some governments would not entertain their dodgy practices for one moment.Any that are that corrupt to entertain them are very dangerous
and corruption works both ways.it can go in your favour but God help you if it goes against.

Baron

Adam Smith @ 9.20:

someone should have dug you up earlier, sir, your succinct point’s absolutely spot on.

on a minor point of bankers’ bonuses, how often do you have to be told that it ain’t entirely their fault. In the past say 20 years or so, global financial flows have been boosted sky-high. Alot more money sloshes around the world now than in the 80s last century. In the same time span, the number of banks that facilitate the flows and take cuts from the deals has stayed roughly the same. This explains about 80% of why the bankers bonuses are what they are. The other 20% comes from the competition between banks to get as much of the fees, commissions and stuff.

on a broader point: those wishing the banks to get lost should be careful, they may get what they wish for; the cost to the country if the banks pack and go will be far greater than the cost of saving themm

TomTom

"who wouldn’t know a derivative if one hit them on the nose"

Derivatives aren't the issue it is simply how much they are reserved against in the sheet. However the bright sparks parked the derivatives in SIVs in Dublin and other lax jurisdictions and expected the taxpayer to cover the downside risk.

Bankers are crap at risk-assessment and thought they could ride the upside and hide from the downside. Bankers who cannot price risk should be pilloried and bankrupted; those who bankrupt sovereign states to pa off their gambling debts should be executed.

Time to make the excitement of risk really something with worthwhile stakes for bankers !

Rupert Page

"The visible trade deficit widened unexpectedly to £8.5bn in October "
...I wonder where we could make this up from...?

yank

"on a broader point: those wishing the banks to get lost should be careful, they may get what they wish for; the cost to the country if the banks pack and go will be far greater than the cost of saving themm"

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Then document it. Here and now. Let's see it tabbed up for the People to review. This free flowing fear mongering babble has to cease eventually... and somebody has to put this down in black and white.

The premise of this blogpost is that things should just be accepted on faith. That's simply an insult, and this publication really needs to stop insulting the Public.

TomTom

""The visible trade deficit widened unexpectedly to £8.5bn in October "

Once the EU imposes Capital Controls - as it inevitably must to avoid collapse - imports from outside the EU will shrink and China will have to eat what it produces

Baron

yank, sir, one doesn’t have to document anything, it’s common sense what does it.

talking from memory, in one single year before the crash the banks’ taxes amounted to a third of the aggregate tax receipts by the Treasury, around £50bn give or take a billion or two. The ‘bailing of the banks’ is likely to cost us a fraction of it, and mostly because of the idiocy of the politicians, ignorance of people, sorry to say it, like you.

you may recall a chap who goes by the name Lord Myners who, when the other lot was still in office, was bashing the bankers, promising to ensure that RBS and Lloyds (owned mostly or partially by the taxpayer) cut bonuses for the greedy bankers. Madness. He should have done the opposite, instructing the two banks to go poach the traders, dealers from the likes of Goldman Sachs, double their bonuses if the need be. If the two banks did that we, the taxpayers, would have been billions of pounds better off today. Instead, the tasty fees from placing the paper from the QE and stuff ended up in the US. Madness, sir, madness.

yank

Well, that's a start, but we'll have to have a bit more documentation than your memory, and a bit more detail in the documentation. As in, separating the commercial and personal banking services sector from the dirties, so that we can review the dirties discretely.

And the idiocy and stupidity of politicians, the public and me are inevitable, and will inevitably be manipulated by the dirties. The bailing of the banks you speak of is more than just bailing. It's 10% unemployment, longterm recession, economic upheaval and human misery.

So let's sift out the necessary data, and we'll put that up alongside the societal costs of the incestuous relationships formed between these investment sharks and governments, and let the Public decide.

Friend Baron says it's going to cost you 50B pounds per year, so we know it's something (considerably?) less than that. Let's find that number.

sunfield

Mervyn King stated (The Second Bagehot Lecture, Monday 25 October 2010) "The official estimate might have overstated UK financial sector value-added by almost £30bn [in the decade] to 2007 – around half of the growth in the official measure,"

So the tax benefit of the finacial sector is probably a lot less than £50bn.