Would he bash the bankers? And how hard? That was the question everyone was asking here this week in advance of the Chancellor of the Exchequer’s “Pre-Budget Report”, which Alistair Darling gave in the House of Commons on Wednesday. By the wonders of the interwebs, you can see his statement or read the full published report. The big financial and fiscal event of the year in the UK is the budget itself in the Spring, when the Chancellor sets new levels of tax and (if he can) offers new public spending commitments; but he also traditionally makes this interim report which has gained special importance this year partly because of the approaching election – if there’s time for a proper budget next year it’ll be a purely political one rather than having much real economic significance – and partly because of growing public unease about this year’s bonus round for London’s rich bankers.
H.M. Treasury | CreativeCommons
All the focus on bankers actually obscured the big picture, which is that Britain, with its huge budget deficit, faces serious public spending cuts in years ahead – and tax increases now. Everyone will soon notice this, either because they’re paying more tax, national insurance contributions (in theory a sort of special tax meant to pay for the NHS and social security, but which in reality affects people like just another “stream” of income tax) or VAT, because their public sector pay is held down or because of cuts in local services. The real political argument is not about whether austerity is needed – it’s simply about whether fiscal wisdom requires the cuts to come sooner (the Conservative position) or whether economic recovery requires them to come later (the government line). And who should pay most. Thankfully I can just about afford still to eat at places like Medcalf, in Islington’s Exmouth Market, an old butcher’s shop now converted into a cool and chichi eatery that serves a decent pint of Adnams beer, too. The kind of restaurant, a little further east, where lunch costs an awful lot more, may now “suffer”, however.
Medcalf | King Coyote | CreativeCommons
Britain’s banks have all, one way or another, benefited from taxpayer support over the last couple of years, and the whole UK financial services industry – previously thought of as a huge success story – would have collapsed had it not been for public funds. Yet Britain’s banks have seemed determined to award their best-paid staff massive bonuses again this Christmas, just as in the mad boom times – even the board of RBS, propped up by billions of our tax pounds and owned by the government, was threatening only last week to resign if Alistair Darling blocked its bonus plans. Many people here boil with anger at the idea that the bailout should fund the high-roller lifestyles of a few people in the City; and the bankers’ argument, that big bonuses are needed to keep these “talented” people in London rather than New York or Zurich is simply laughed at if raised in the pub, City “talent” having helped cause the financial crash in the first place.
Well, if they still want to pay those bonuses, they can. But it’ll cost them. Darling announced a new tax, not on the recipients of the bonuses, but on the banks that pay them: if a bank pays anyone a bonus of more than £25,000 this year, it will have to pay a levy to the government of 50% of the excess. Predictably, this has angered rich people in the City, though strangely enough they oppose it both on the grounds it will make them leave Britain and on the grounds that it won’t work. Serious critical analysis from the talented? Or mere gut resentment from the spoiled rich? I know what I think.
If the economic outlook weren’t gloomy enough, the residents of my home town Warrington also have to cope with the news that they have Britain’s worst quality of life. Apparently. To be fair to the Audit Commission, it’s not to blame for “branding” Warrington in this way; the media is, for the way it’s reported this. But both the exercise itself and the reporting have something absurd to them. The criteria used by the Audit Commission build in serious elements of relativity and quality-blindness: it is not the amount of crime that counts, for instance, but the reoffending rate among those young people who do offend, however many or few of them there are; and whether their ethnic profile matches that of the community. I think it must follow that Warrington could improve its rating by catching fewer repeat offenders, and perhaps letting them off selectively by race. And it is not how well Warrington assesses children with “special educational needs” that counts (how could that be measured?) but how many of the resulting “statements” are issued within 26 weeks. It follows that Warrington could improve by doing them worse, but quicker. Hardly surprising, given this sort of tick-box “performance management” approach, that Warrington should now suddenly be “red flagged”, in strange contrast to last year. Warrington is far from paradise, but (although I’ll avoid doing a Boris by naming anywhere else) anyone who says it’s the worst place in Britain to live simply proves there are many other towns they’ve never visited.
Inside the Ring O' Bells, Lower Stretton, Warrington
The quality of some things in Warrington remains beyond doubt, though, including the Ring O’Bells, just south of the town on the way towards Antrobus, in Lower Stretton – an old-fashioned pub, this, with a real fire and a Christmas tree, and where Francesca and I went for a pint with my parents last weekend. I’m sure they’re looking forward to an early visit from the Audit Commission’s beer tasters, service speed acceleration inspectors, Christmas tree decoration-load assessors and fire warmth intensification measurers. And I dare say the Ring O’Bells will also be safe from anyone’s cuts.
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Anglotopia was founded by Jonathan and Jackie Thomas for people who love Britain - whether it's British TV, Culture, History or Travel - we cover it all. Anglotopia was started to get us back to the UK for a trip and it did that in 2009. Now, the goal is for Anglotopia to make our dream of living in the UK a reality.
If they want to leave London for greener pastures I say bloody well let them and make room for people like me who actually want to live in Britain.
Washington would do well to follow a similar plan to tax bonuses, then these people won’t have anywhere to hide and evade tax.
I say “let them go” too. These people never mention the indirect benefits they get from living here – the schools (many of which, in rich areas of London, are excellent and free), shops, restaurants and theatre they enjoy, the availability of the NHS to cover all their and their children’s medical needs regardless of cost (that’s still valuable even if you’re very rich: how much does it cost to insure a child with a rare condition, I wonder?), the relatively low crime rate, proximity to other nice places like Paris and so on.
So I doubt many of them will go – but we’d be better off if more did.