Tuesday, 2 November 2010

Crumbs from the bankers' table or progressive tax and regulation?

How grateful should Londoners be for the Mayor's latest call on bankers to "give something back" by donating some of their bumper Christmas bonuses to after-school clubs?

He says:

"With the bonus season upon us, I hope others — individuals, as well as institutions — will give something back"

This is little more than a smoke screen.

If Boris Johnson really believed bankers should pay something back, he wouldn't have spent his time as Mayor campaigning against:

He wouldn't have dismissed calls for fairer tax and regulation as "neo-socialist claptrap" and he wouldn't have wrote that people should "stop whingeing about house prices boosted by City bonuses".

It seems the Mayor wants us to forget that the banks' wreckless behaviour caused the economic crisis and resulting budget deficit. And he wants bankers to encourage our collective amnesia by sparing a few crumbs from their table of generous bonuses for charities of their choice.

Of course, any charitable donations from bankers or anyone else this Christmas are welcome. But this misses the point.

Charitable donations will not prevent another financial crash. Nor will they reduce income inequality or contribute to balancing the government's books. They shouldn't be allowed to take the place of progressive taxation by absolving bankers of their real responsibilities.

Only regulation and a tax regime which encourages corporate responsibilty - the very things Boris Johnson has campaigned against - will achieve this.