FROM THE LAND OF CHEESE AND CHOCOLATE…

George Osborne and the Con Dems are prettymuch on their own when it comes to standing up for the bankers and their bonuses. Swiss voters have overwhelmingly voted in a referendum to impose some of the world's toughest controls on executive pay. Almost 68% of the Swiss voters backed plans to give shareholders a veto on compensation and ban big payouts for new and departing managers.

More popular than the Bankers...

While understandably some Business groups argued the proposals would damage Swiss competitiveness ordinary Swiss voters were more concerned with the growing economic divide in the country. The Swiss vote came a few days after the European Union agreed new measures to cap bankers bonuses. Referendum results showed that all 26 Swiss cantons backed the proposals, with 1.6 million voters voting "Yes" with 762,000 voting “NO”.

Multibillion dollar losses by Swiss banking giant UBS (which were covered by the Swiss government), and thousands of redundancies at pharmaceutical company Novartis, have caused a wave of anger in Switzerland as high salaries and bonuses for managers had remained unchanged. The new measures  give Switzerland some of the world's strictest corporate rules, with Shareholders having a veto on salaries, golden handshakes will be forbidden, and managers of companies who flout the rules may  face prison (now there’s a nice idea!).

The so called "fat cat initiative" will be written into the Swiss constitution and apply to all Swiss companies listed on Switzerland's stock exchange. Last week the European Union agreed a deal which means that bankers bonuses will be capped at a year's salary, but can rise to two year's pay but only if shareholders approve. The Con Dem Government has argued the EU bonus rules will drive away talent and restrict growth in the financial sector.

Remember this...

"It is wholly untenable to have millions of people making sacrifices in their living standards only to see the banks getting away scot-free." 

Nick Clegg, Deputy Prime Minister, 17 December 2010 

and also this...

"Bankers have to realise that the British public helped to bail out the banks and it is very galling when they see bankers pay themselves unjustified bonuses." 

David Cameron, Prime Minister, 17 December 2010

The former New Labour government made much of its light (more like non-existent) financial regulatory touch, well at least until the wheels came spectacularly off the wagon. The Con Dem's have effectively refused to take any action over banking regulation until after the next Westminster general election. Interestingly enough before the government limos arrived (and they were in government) before the last Westminster election Vince Cable (currently the Business Secretary) and George Osborne (currently Chancellor) were at it hammer and tongs as to who was going to be toughest when it came to regulating and controlling the worst excesses of the banks.

Personally I think that The Con Dem UK Government (and their formerly New Labour predecessors) have missed an opportunity to break up and 'privatise' the larger 'publicly owned' financial institutions, they should have sold the shares on the open market with specific quotas on how many shares any one institution can own. From where many people are sat these bloated overgrown banking organisations appear to be a serious block on the ‘free market’ and too busy lining their own pockets. George Osborne and the Tories appear to have reluctantly gone along with the much publicly stated need to regulate the more unsavoury aspects of the banking sector, but, whether they will actually and eventually do anything is open to question.

Perhaps they ought to come clean and simply declare an interest as regulating the banks in the City may impinge on the acquisition of future lucrative directorships in City banks unless they have them already that is? One question that may also remain unanswered is whether or not they will do anything about tax evasion, tax avoidance and the regulation tax havens? It's odd really because the Con Dem's have displayed such zeal in their efforts to chase people on benefits.

TOO LITTLE, TOO LATE?

News that the government says it will increase the levy on banks to £2.5 billion this year which will bring in an extra £800 million in tax, may well be a case of too little, too late. Chancellor George Osborne made much of this yesterday stating that the tax was being brought forward before banks announced their bonus payments.

Very nice, save for the fact that for the big ‘5’ banks 800 million is about one weeks profits. Oddly enough, according to the Bureau of Investigative Journalism, more than half of donations to the Conservative Party last year came from the City of London. The report noted that firms and individuals donated £11.4m in 2010; this brought the total of City based donations since David Cameron became leader to more than £42m.

The Bureau of Investigative Journalism, which is a not-for-profit organisation, examined records of donations held by the Electoral Commission and Companies House. It concluded that last year, City donations totalled 50.8% of all money given - up from around 25% in 2005, the year in which Mr Cameron became Tory leader.

The bureau said that 57 individuals from the finance sector gave more than £50,000 last year, entitling them to membership of the Conservative Leader's Club. Naturally the government has rejected suggestions that donors were influencing policy, unless of course you happen to be Lord Ashcroft.

Of course New (and Old) Labour leaders and Labour prime ministers have quite happily taken millions of pounds of funding on behalf of their party from trade unions, and they (the Trade Unionists) have also had any influence on Government policy (yet they keep on paying), just like the rest of us will keep on paying to bail out the banks.