Thursday, 28 October 2010

Big Money

The CEBR - Centre for Economics and Business Research have come up with a report (pdf) that bonuses paid to city banks will be in the region of £7bn this year.

So, no change in the bonus culture then. The idea remains as it was before: whilst most people must fulfil the terms of their contract to earn their salary, bankers are simply contracted to turn up. If they do anything, they get extra money on top of their salary, the 'bonus'.

Of course, that's a bit simplistic, the barely veiled sarcasm of someone outside the industry and its rewards.

Then, earlier in the week I heard Ken Clarke talking to the BBC in Birmingham at the Tory Party Conference. Asked for his comment on the current Chancellor's proposed cuts to child benefit, he was keen to contextualise the austerity of the measures, saying:
I don't think people really understand the seriousness of the situation we're in.
He's right. People simply don't understand the seriousness of the deficit crisis facing us all. It's difficult - impossible - to really get a grip on the sums.

Which is exactly why the likes of Clarke - and Osbourne, Danny Alexander, Cameron, Richard Lambert of the CBI and a welter of senior businessmen across the square mile should check themselves immediately. People are worried about saving several hundred pounds. Not thousands of thousands of hundreds. There's a huge - unbridgeable - disparity in the understanding of the problem both up and down society.

So it may be simplistic to lampoon bankers as treating their salary as a retainer and expecting more for actually performing. From the perspective of a hard working banker this might be totally ignorant. They may be worth it. One cannot tell from the sums involved, they're too fantastically small to a modern, globalised businessman, too fantastically large to a local florist.

The point is that the cultural difference, the meme, does have a perspective parity: the banker gets a minimum income, the worker a maximum. Whatever the actual rewards involved, until the city address this perceived iniquity it's difficult (to use a banker's turn of phrase) to move forward.

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