Good news for City job-losers: it’s your chance to be reborn as useful citizens

‘Like a scene out of Village of the Damned,’ one UBS banker describes the moment of collecting his redundancy envelope. He’s over-dramatising, I’m sure, but let’s not be unsympathetic: in my banking days I found myself on both sides of that life-changing moment, doing the sacking and being sacked, and it’s never painless, even when you’ve got a mass of fellow sackees for company. The Swiss group is culling one sixth of its worldwide workforce. Managers warmed to their task last week by cancelling the passes of 150 London staff, who join around 100,000 other City job-losers since the onset of the financial crisis; according to the Centre for Economics and Business Research, numbers in work in the Square Mile and Canary Wharf have fallen back to mid-1990s levels.

A surplus of people and a shortage of deals to occupy them, combined with multiple provisions and fines for misbehaviour, mean the bank bonus pot has been shrinking even faster: CEBR predicted it at £2.3 -billion for 2012-13, compared with £11.6 billion in 2007-8. All this is bad short-term news for tax revenues, but good long-term news for the shape of the economy. Overlay City numbers on the wider employment statistics I highlighted a fortnight ago, and you’ll find a much-desired rebalancing happening before your very eyes: from public sector to private; from financial services to more productive activities; from big, dangerous banks to smaller, focused ones. The City may well be a village of the damned these days — but it is one in which the zombies, having collected fortunes for their troubles, have the opportunity to be reborn as useful citizens.