Social and political commentary from a conservative perspective

Peter Hain threatens City bonuses

Despite their attempts to pretend otherwise, the green-eyed monster is alive and well in the Labour party. Here is this story from The Sunday Times:

Peter Hain, who is bidding to become Labour’s next deputy leader, has threatened government curbs on “grotesque” City bonuses … . He is warning that unless Britain’s business community shows more restraint in the pay and perks of top executives, the government should intervene to regulate them.

Exactly what business is it of Mr Hain’s and the Government’s what a company, accountable to no one but its shareholders, chooses to pay its executives? And this from a Government that has done its utmost to stifle private enterprise. This Government has subjected business to the most complicated, burdensome tax regime ever. On top of that, it has taxed it heavily, regulated it highly, and raided its pension funds. So much so that warnings are increasingly being sounded about the increasing appeal of other countries (see here, here and here). These businesses deliver high taxes to the Treasury, which are then wasted in typical New Labour fashion. Not content with all that, they are now turning their interfering gaze to boardroom pay.

Peter Hain is standing for Deputy Leadership of the Labour Party, and no doubt knows that this sort of talk goes down well with the Party faithful. This is nothing but the politics of class envy, playing to the baser instincts of his Party members. And this from a Cabinet minister in a so-called ‘modernising’ Government. He should be thoroughly ashamed of himself.

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Peter Hain on City bonuses again

It’s Sunday, so it can only mean one thing: politicians are attacking City bonuses. They certainly seems to make a habit of it on Sundays (see here and here).

This time, it is our old friend, Peter Hain. He has returned to his favourite theme. Now he wants City workers to pay two thirds of their bonuses to deprived communities.

Exactly what is it about private enterprise that Peter Hain does not get? Is it the bit about what companies pay their staff being no business of the Government? Or does he not get that these bonuses have already been subject to high taxes, which in turn were supposed, under Labour, to have already been ‘redistributed’ to these deprived communities he so champions? Or perhaps he does not understand that people are generally paid what the market feels that they are worth?

What is it that Mr Hain cannot understand? I would have thought that these were truths apparent to a secondary school economics student, even in these dumbed-down times. I know the Left traditionally has a history of woeful ignorance in matters of the market, but at this stage of his political career, there is frankly no excuse for Peter Hain.

Peter Hain, and by extension, this Government, must learn that not everything is to be determined by political decisions, or legislative action. Some matters transcend even the so-called ‘good intentions’ of a Labour government.

By making this suggestion, Mr Hain is admitting that his Government has failed in its avowed pledge to tackle poverty. In 2005-06 (see pdf), this Government collected £405 billion in tax. It paid out a net sum of £17.3 billion in tax credits in that same year. Going by previous years, the taxman estimates an overpayment of tax credits of almost £1.8 billion.

So having collected, and ‘redistributed’, the above sums, there are still deprived communities in the UK, to which Mr Hain wants City workers to contribute? Unbelievable.

Under this Government, we have seen taxation rise to the highest levels for a long time, with nothing to show for it. If Peter Hain wants to act concerned about the plight of deprived communities, perhaps he could start by questioning his own Government about their failures in this regard. He could ask them precisely how it came to be that despite record tax levels, and despite their claims to care about the underprivileged, we are in the situation that we are.

Then after doing that, he could take a few weeks off work and enrol in a community college in Neath for a crash course in economics.

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LibDems attack City bonuses

The green-eyed monster is at it again.

First, it was Peter Hain, now it is the Lib Dems’ turn to grumble about City bonuses. Their Treasury Spokesman, Vince Cable, attacks huge City bonuses, claiming that they highlight ‘the gross levels of inequality in human wellbeing up and down Britain’.

Of course they do, but that is no reason to take action against them, especially as they are not the reason for the inequality in the first place.

As to ‘the gross level of inequality’, is Mr Cable unhappy about its existence, or merely about the fact that it is being ‘highlighted’? He comes up with a number of daft proposals; such as denying tax relief to senior executives on their pension contributions, and the possible removal of taper relief on the sale of second homes and stock options.

I’m not really in the mood to discuss the reasons that these proposals are sheer madness; this is, after all, Sunday. I should be halfway through the Sunday Telegraph magazine or some such by now. All I will say for now is: since when is it the Government’s business what a private company pays to its employees? And in case it has escaped Mr Cable’s notice, higher earners currently already pay higher taxes.

Maybe I will return to this topic later, maybe not. It all depends if Mr Cable provokes me again. Back to the Sunday Telegraph magazine.

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