NICK Clegg, the Liberal Democrat leader, yesterday called for a change in the "damaging" bonus culture of the City at a time when many hundreds of thousands of people were facing intense economic anxiety.
Publishing a new Lib-Dem manifesto, A New Deal for the City, Clegg said it was not just popular feeling but serious analysis that had shown "the bonus culture has been deeply damaging, a one-way process".
The Lib-Dem leader said his party had tw
o concrete proposals for dealing with that culture, including that bonuses should be paid in shares, not cash, vesting over ten years to give time for problems to emerge before they are paid out. Clegg said this would be better than going back to the "absurd" pay controls of the 1960s and 1970s.
In addition, he said the Lib-Dems would support greater power for shareholders to approve such remuneration, with their votes perhaps being binding on companies.
Clegg also called for greater transparency in the City tax system by doing away with all loopholes and exemptions.
In a wide-ranging document, Clegg said the Lib-Dems preferred a "freewheeling" banking system that took risks but was not bailed out by the taxpayer when things went wrong as Northern Rock was.
The alternative was for banks to operate like "utilities", providing a service for depositors with minimal risk, whereby banks could then come to the government if they did get into trouble.
Clegg said it was currently "the worst of both worlds", whereby banks expected to be bailed out by government after taking irresponsible risks.
The full article contains 269 words and appears in The Scotsman newspaper.
