i really dont get this.

if the government has to bail out banks with billions of taxpayers money to keep them afloat, how can the banks then afford to spend £20 billion a year in bonuses ? Why arent they forced to pay it back to inland revenue ?

Yet if a normal average person owes 1k to IR they cripple you to get it back, plus interest.

Also, if you go overdrawn by £0.01 you get charged a total of around £30 by said banks.

 

I don't get it either mate, i wouldn't get a bonus if i was fucking up my bosses business

 

most bankers have it in there contract they receive x % of all profits they make this motivates them to do well etc also as a bank if you have staff doing well would you want to loose them and have to retrain etc ?

a lot of the lower end banking staff only get a few grand bonus its only the top bods and traders who get the good bonus firgures.

 

its just a loan though, pretty sure some of the banks have paid a good whack back already???

 

The banks who were not bailed out, can obviously do whatever they want, the government cant possibly tell a company that has acted responsibly and made money that it cant reward its staff.

Banks that were bailed out, actaully need to be able to offer a decent renumeration package otherwise they wont be able to attract decent staff, and the billions of pounds of shares that we (ie the government using our taxes) own in those banks will end up worthless.

So IMHO the way to do it, is tax the bonusses at 80% from all the banks, as that way it doesnt advantage or disadvantage one bank versus another, and the public still get their money back.

That would probably be illegal though, and im sure the bankers would fight it if it was.

 

there are loads of ways round it one bank instead of giving bonus gave a 30% payrise, others give shares in the company on a multiple scheme.

we have ours next month so will be interesting

 

or the companies give the staff help in relocating abroad (as is the case with our main competitor, and may become the case for us).
then the employees get to live it up as expats, don't pay nearly as much tax and the economy here loses out.

good move Gordon!

 

Agreed, trying to force rich people to pay a lot of tax is a very stupid thing to do, they will just decide they dont want to play anymore, take their ball and fuck off!

 

On another note, the thing that I really really don't agree with (somewhat predictably perhaps) is the fact that if I were to earn a bonus of 25 grand or more this year (bearing in mind I work for a BROKERS not a BANK! and am in IT and not part of the broking business as such) I will also be subject to this higher rate of "windfall" tax.

Whilst I don't disagree that the banks that were bailed out have something of a duty to refill the public coffers by some means, I fail to see why an IT worker in a brokers (i.e. we don't gamble with money and then need bailing out!) should be subject to what I have no doubt is a punitive measure being taken against the financial services industry.

 

To me I dont see why you being included in a punitive measure against the industry as a whole, is any less fair than you benefitting from a bonus that is part of that industry as a whole, its not typical for IT staff to get bonusses like that, its relatively unique to the finance sector, so I dont see why it shouldnt be included in taxes aimed at the same sector.

Obviously thats easy for me to say, as I work for a car firm, which means the only bonus im likely to get is not being laid off, where as you wont be objective about it cause its your own money we are talking about

 

If you are getting a bonus based on the BANK making profit etc then you are part of that bank and all the departments that make it run on a day to day basis you cant then say im only IT so shouldnt pay higher on it.

Shoe on the other foot what if they say well your only IT and didnt directly make or loose money so why should you get a bonus

everyone together makes a bank work from HR to front office and everything inbetween

 

indeed!

thought this one might receive some interesting opinions!

would you regard someone working at a stock brokers as being part of the financial services industry?
if so, how did they contribute to the downfall of the banks?

 

The same way they contributed to the success of the banks to justify a bonus, by operating in a supporting role.

How is it any different in that respect if its in your favour to when its to your deficit?

Either you are a part of the system and deserve to be rewarded and penalised as such, or you arent surely?

I dont see the distinction where by you are only a part of it if it suits you, as being a fair one.

 

If you read my post, you will see that i don't work for a BANK!

Regarding the shoe on the other foot bit, I can quite honestly claim that 2 of this year's projects in which I have been the primary resource have reduced operating costs for the company by soeveral million quid, with further savings to come over the next 3-5 years, not to mention that security initiatives which have been driven by the team I have been working in over the last 6 months have made significant contributions towards keeping the business as a whole running where some of our competitors have suffered disruption and downtime.

 

high street banks and investment banks are different, high street banks arent the best payers for brokers......lol,

i used to work for a big name investment firm and still have a lot of mates in that industry it isnt a nice place to work at the moment, money aside

 

Sounds like most years for me in IT, thats the norm in big organisations isnt it?

 

lol, thats true before i got into the investment banking sector, which iam now out of, i was in telecoms before during and after the tech boom, most of them were struggling to survive afterwards.

saying that the ones that survived are stronger then ever have a good solid base and income, imo this is what will happen in the investment banking sector and underwriting

 

Indeed, I was involved in big telecoms projects in the mid to late 90s and if a project didnt save 50 million quid at least, it never even got signed off

 

I'm not suggesting that I should reap the rewards when it's going well and wash my hands of everythign when it's not, a you rightly say, that wouldn't be fair.

However, I believe that if a system is in place then those that have misused it and cost the public money should be the ones that are punished for it, and not everyone involved in the system.

As a kind of poor analogy -

if everyone is driving around at 30 mph, and 5 or 6 people want to drive like lunatics speeding through red lights until someone is killed, why should all the people driving sensibly get the ban/fine/prison/etc etc? They too were on the road, and as such were part of the system. They may have had no more involvement other than to get out the way for self preservation, or may have been carrying on their business totally unaware that this was happening in another part of town.... so surely it's not right that they should be punished? (and in my case i'd probably be more like a passenger in one of the cars driving sensibly I suppose!)

 

i remember being fresh out of school (its not what you know its who you know), in a start up telco company in 1998 drinking champers watching our ipo on the big screen, that didnt last long ha

after that it was all doom and gloom

 

depends on the organisation form what i'm hearing form firends i know at other firms!
some IT departments piss money away like it's water!

 

well I saved, 2.5 mil last year due to a project and what did I get, a letter from the A&N media MD thanking me. Thats fucking it, so why should a bank (I know your not in a bank mark) give me a bonus if the bank still oues us the goverment money. Yes I would like the money, but my company would rather make sure they are on a good standing due to these trying times.



I must admit we used to piss money away like water, not any more getting 2 new G6 machines for a test cluster, I needed to bend over and the MD did me dry!!!

 

Thats exactly how what you are saying comes across.

Im sure lots of individual brokers who didnt lose any money themselves would feel the same way. Why should they be penalised for their colleauges mistakes.

IMHO you either attempt to control the whole industry bonus scheme, or you dont do it at all, it just doesnt make sense starting to go "except for this person, and double as much on that person" etc

 

Most of us in IT say that "we" saved the money, when 9 out of 10 times its the case that any other IT bod in the same job would have done the same sort of thing anyway.

So it's weird taking personal credit for it, when its simply the IT role that saved the money, irrelevant of who the individual in that job was, im sure the effects of all the projects ive been on where they have saved or made millions, would have had a similar effect with or without me personally.

 

Fuck me I agree with you!!!!! so why will it not be the same case in the money market?

 

I nearly always talk from a point of almost total objectivity, so IME most people tend to agree with me most of the time unless they are being subjective, as facts are facts after all.



Im sure it will.

 

would you guys be happier then if the bankers wage was raised by their usual bonus's then? so instead of the banks paying out 20bil in bonus's it would be 20bil on top of their wage bill?

 

Doesnt effect my personal happiness either way TBH

As I mentioned at earlier in the thread, I realise that the top people are able to demand good renumeration, and if we try and tax it too much they will just decide to opt out of UK taxes full stop.

The government needs to do *something* to keep the man on the street happy, but it wont be much as they cant afford to piss the city off.

 

well it's not quite what i meant.. apologies for giving that impression.

it's unlikely that any brokers will be losing company money... they don't gamble with the company's cash!

the point is, it is not the indiviual trader that's bailed out by the government, it's the bank as a whole... it's not the entire industry that's bailed out by the government, it's individual banks within that industry!

(of which, neither i or the company I work for fall into either category other than the industry as a whole... in fact, I wonder how the amount of revenue generated by the industry AS A WHOLE standsd up when compared to the amoutn that the government has paid to bail out the small number of banks that it has?)

 

As per what I said above, if the government limit measures to only the banks that they have bailed out on this occasions, they are shooting themselves in the foot, as they now own massive shares in those banks.

Our entire financial market is constucted around a bonus culture that seems to massively reward huge risk taking on the times those risks come off, but do nothing to penalise on the times they dont.
So just collecting a big percentage of tax on all the money involved in that industry to then use to bail that industry out, appears fair to me, however, like I said above, I understand enough about how things work to still realise its a bad idea, even if I think its fair.

 

This is not likely to happen imo.. it may for a select few but the good thing about bonuses from a company's point of view is that they are often either discretionary or performance related, meanign they are not comitting to paying a certain amount of cash for the rest of a person's term of employment.

 

Also it would mean that you could work 10 months of the year, then clear off right in the middle of things and leave the bank in the shit, and still have received your "bonus" anyway.
Huge bonusses bring 100% commitment up to the point they are paid out, as its too much to lose!

 

very true, and 100% commitment is definitely required in this industry.

 

Spin,spin,spin,spin!! The bankers are already paying 40% on their bonuses, what's another 10% in the grand scheme of things, other than a cynical attempt by the fat one eyed Scot to buy a few votes?

 

Also, as far as the government shooting themselves in the foot goes, this is where I lose my (already limited ) objectivity... imo they should have regulated things better in the first place if they didn't want this to happen, or perhaps just let the banks fold and dealt with the wider ramifications of that!

I've always been of the opinion that that's how business should work... the ones that lose money go under, the ones that make money grow!

I think we're just going to have to agree to disagree on the taxing of the bonus point, as I can't see us ever seeing eye to eye any further than something should be done to ensure that the money is returned to the public, not only to redress the huge deficit the government now has, but also to plcate the general man in the street.

(still don't think I should have to pay though! )

 

well if it's a 25k bonus then a fairly significant sum of money imo!

 

The problem is, if the government hadnt bailed out the banks, then lots of people's pension funds and savings would have gone, undermining the whole economy.

So the government had no choice, essentially the banks are in a situation where the government simply cant afford to let them fail!

Its a great place to be!
Take a massive risk, if it pays off you get a huge bonus
If it all goes tits up, you get bailed out and given another go.

Its like playing a fruit machine with someone elses money

 

fuck 'em! my bank has no problems
(no, i'm not being serious befoer anyone goes off on one!)

 

Personally I actually WANT you to get massive bonusses untaxed when working in IT in the city, it all has a net effect on contract rates and wages in the broader IT industry anyway

 

glad to see you're looking at the bigger picture Chip!