As I sit here struggling with 11 across, [A term of abuse, sounds like Banker (6)], I’m a bit puzzled by one bit of Darling’s rhetoric about City bonuses.
I understand the politically-driven punitive motive (indeed most of us would like to see these fat cats in the stocks) and I understand the hypothesis that it is a good thing to discourage payments that might lead to excessive risk-taking using other people’s money.
But how does this apply to the “guaranteed bonuses” that have become such a bogey for No 11? We learn today that is was only after intervention by the Attorney General that Darling was persuaded not to include guaranteed bonuses in the super tax target area, since to do so would infringe Human Rights legislation.
A guaranteed bonus is, by definition, not performance related. If one accepts that variable pay is more likely to influence behaviour, surely the very fact that these payments are guaranteed makes them less likely to drive day to day risk taking? Why then the bogey status?
Am I missing something here?
Nurse! Isn’t it time for lunch?
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