Oh Lib Dems what are you doing to me? I sit her in my toothpaste stained jogging bottoms and a t-shirt saying ‘Brain Loading…47% Please Wait’ and feeling good playing Bejeweled Blitz and then I see a tweet and my anger soars to record (well that’s a lie – nowhere near record levels but still I’m pretty pissed off) and why I hear you ask? Well because of this tweet from a Liberal Democrat Peer…
It seems pretty innocuous but still, ‘We were told if we didn’t pay huge bonuses to bankers they would all go abroad. And the problem with that is? ‘ I think I need to respond for what the problem with that might be.
First of all the city is actually a vital part of our economy. As much as it is hard to say in this day and age when everyone wants to crush the bankers and the banks as I have blogged about on numerous occasions before, I think it is fair to say that the city helped us get into this mess but that without a strong city it is highly unlikely that we are going to get out of it. We can’t just kill the city because all that will do is stunt growth. It isn’t rocket science but it seems like it might be for some people.
The winner of the Best New Lib Dem Blog last year Richard Morris agrees with the Baroness:
‘@neilmonnery @baronessros of course you are presuminging (sic) that A)they would go & b)we wouldn’t find anyone equally ‘talented’ to replace them
Well first of all I think the presumption that bankers might leave the UK if they get offered more money overseas is a fairly safe one to presume. I know – and I repeat – I know – that this is already happening. People that I know are losing staff members because their bonus cheque for the last financial year was shall we say lacking. These are people that actually make money for the banks – and in turn therefore make money fr the UK tax payer – but they are going because they can earn more money elsewhere.
I also think it is fair to say that this happens in all forms of life. People will move on if they get a better pay packet elsewhere. It is why I can never understand why football fans get so worked up when a player leaves for another club and a huge pay increase. People go where the money is and everyone has their families to worry about and such. Even if they don’t then why wouldn’t they take more money to do a similar job? You would as would I. If someone offered me a job to do the exact same as I was doing today for a lot more dosh then I’d be off like a shot. We all would.
So I think we can safely say that the very best will move on – and we know they are the very best because other banks will want to hire them. The people who are crap and make no money won’t be highly sought after. This is how it works. That is purely logical. If you are good at your job then you will have more doors open to you to move onwards and upwards. If you stink then you try to tread water and stay where you are.
As for presuming that it would be hard to find people equally talented enough to replace them, well this one is simple. If they wanted to work in the banking sector then they already would. Rightly or wrongly the banking sector is motivated by one thing – money. If you work in the city then it is highly you like money – and a lot of it. You may also like women and drugs but these aren’t as big of a prerequisite as liking money. No-one gets into the banking industry because they want to save the world. They get into it because they are clever enough to and want to live a good lifestyle.
People say that they want the bonus culture slashed because it is obscene that bankers get huge bonuses when they do a bad job but what about doing a good job? If regulations are put in place in the K (and for UK based firms operating overseas) that reduce the bonus culture then all it will succeed in doing is force the good workers who make money to leave. They won’t stay and enjoy seeing their salaries culled they will just move on.
Going back to the original tweet what is the problem with all the people who make money going overseas and stopping making money for UK firms who employ people in the UK and pay plenty of tax in the UK (both the company and the employees) well let me think…I think I may have showed exactly the problem in that previous sentence.
Look I know it’s cool to bash the bankers. It is cool to see them as a collective and they are all as bad as each other. Well one thing I have learned in life is not to tar everyone with the same brush. Not all redheads are fiery and gorgeous (although most are), not all fat people are jolly, not all Tories were born with a silver spoon, not all Labour voters think pie & mash is the best meal ever invented, not all my online dating experiences have been horrific (well this one is close) but yes you get what I mean.
Yes the bankers who were dishonest and screwed things up should face the consequences but should those who have done and continue to do a good job face the same sanctions? Morally of course they don’t. You have to be an idiot (or a member of #ukuncut) to believe such nonsense but putting aside the moral argument it doesn’t make sense from a financial standpoint going forward either.
Like it or not many bankers are terrific at their job and earn their bonuses. If a department earns a company say £50million profit then what is wrong with a percentage of that money going to the people who helped earn the money? There are two things that motivate most people and money is the big one and the other is the promise of sex. They are the things that will motivate most people so if not money then do we propose lots of free sex on tap for good work? I’m not sure that will go down well in some departments so if it’s neither money or sex then what motivation do bankers have to work those extra hours and get business done? Not a great deal.
Some bankers are bad. Many more aren’t. Until we can get our stupid heads around this fact then bankers aren’t going to fare well. The sad fact that both the media and the government (both sides of the house) are willing to throw the banking industry under the bus because it fits in with what the electorate want to hear is depressing and when Lib Dem peers think that the bankers are one entity – and in so think they are all bad and wouldn’t be missed – then even the Lib Dems are starting to lose their sense of the real world.
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No-one ‘earns’ a million pound bonus. Entrepreneurs that start and build a successful business maybe, but jobbing bankers?
Just because the rot is so widespread that chief execs have convinced everyone that for one person to be awarded the sort of money that triggers a local school being closed is of a scale that is ‘reasonable for the industry’ doesn’t mean it is.
Every year bankers take money from their own banks that should go to customers and shareholders. They simply do not understand the concept of ‘enough’, relying on blackmailing their remuneration committee to just give ‘more’.
If you really put excess above living here then you clearly don’t have anything to offer society, not least your local community, and are probably not paying as much tax as you should. Good riddance I say.
I agree with Ros Scott.
These greedy, amoral bankers at the top of the current banking system are bad for both banks and our economy.
The whole money thing is one big con on bank customers and the government. If you will work for £1 million a year then my bet is that you would also work for £250k per year. If not then clear off. There are plenty of people capable of running banks who would work for a lot less than the present lot and might actually like the job and want to work for customers.
Righ on Ros!
As well as money and sex, people are also motivated by being respected in their community. The problem with banking has been that the integrity that earns respect got pushed out by all the moneymaking. Now they have lost the money as well as the respect. No wonder they are leaving. And no wonder the rest of us say ‘good riddance’. Until banking reacquires its integrity (and thus our respect, which will take longer) then it’s going to be tough being a banker. Maybe the UK will lose short-term earnings because of that. Maybe the country (including its banks) will be richer in the long term.
[…] Lib Dem Baroness Ros Scott has caused me to blow a gasket by Neil Monnery on The Rambles of Neil Monnery. Neil says bankers are not all […]
In the light of various banks’ “success” being predicated on systematic fraudulent behaviour, not least the Libor affair, how about providing some evidence that the people who float to the top in the banking industry do so out of actual talent, and not simply because they are able to tread furthest beyond the bounds of ethics and decency without either being caught or discovering a conscience?
1. I think that it is a very fair assumption that the vast majority of people working in the banking industry do so because of the financial rewards that it offers – not because they enjoy the job.
2. Related to point one but yes – if people saw their bonuses cut by 90% (like they are getting) then they will move on if they could find better money elsewhere. Yes no doubt some would happily forgo tens of thousands of pounds a year to live in the UK but many more won’t if they don’t have to.
3. The problem with the current model being good for us is the current model is a high bonus culture. That is being challenged and those banks that are now in part owned by the taxpayer have had their bonus culture slashed and this is the first financial year under the new rules and lets say happiness is not exactly flowing through the employees of those companies…
The big issue is that we can change our culture but that doesn’t mean that the rest of the world has to follow suit. If the other big financial sectors aren’t being regulated by such rules then what is to stop these cities taking away a lot of trade from the UK? Nothing that’s what…
Your argument makes a number of assumptions that I think can and should be challenged:
1. That the only motivation for successful bankers is maximising their income. My guess is that there would still be a good pool of people with the ability to be very successful if incomes were much lower.
2. That all talented bankers would leave the UK if incomes were lower. My guess is that lots of them like living in the UK and would not move abroad for a host of reasons.
3. That, overall, the current model is good for us. There is a lot of evidence that the ‘greed is good’ approach to finance is as much a cause of many of the problems we face as the solution.
Overall I thing we should be challenging the idea that ever rising incomes for those at the top of the heap (not just banking) is a good model. We should be aiming for a society where the gap is narrower and doing a job well, and for the general good, is seen as part of the reward.