Bankers' bonuses: Blind eye to blind rage - The Guardian

Doesn't it make you angry that the banks have been allowed to ride roughshod over our economy, and are still handing out bonuses by the bucket-load? The question is not ours, it is Nick Clegg's – posed in his preface to last year's Liberal Democrat manifesto. Eight months on, as the season of self-enrichment gets going in earnest, he now strikes a more timid tone – yesterday emphasising the structure rather than the scale of the loot, and pleading with those bailed-out financiers who are in the direct employ of the taxpayer "to be sensitive".

The deputy prime minister's loss of nerve is nothing compared to the body swerve being performed by his boss. Having called two years ago for a £2,000 bonus cap to be imposed for as long as the taxpayer retained a banking stake, David Cameron said at the weekend to say it would be wrong to "scapegoat", "micromanage" or "bash" the banks, thereby creating the impression that he will do nothing at all.

Maybe, just maybe, it is all a cunning plan to under-promise and over-deliver. This is, after all, the single issue on which the gulf between public opinion and government (in)action is widest, and the fury may reach a new pitch today when Bob Diamond of Barclays, who could reportedly be in line for as much as £8m, appears before MPs. If the bitter expectation of business as usual becomes entrenched, Mr Cameron could seize a morsel of credit by restraining the nationalised Royal Bank of Scotland when its own bonuses are finalised in a few weeks. There are still decisions to make, and weekend reports that RBS chief Stephen Hester will pick up a £2.5m performance-related top-up could prove to be out of line.

Don't bet on it though. The sinking of Vince Cable's star has emboldened the City's belief that it can do as it pleases, and strengthened the hands of those ministers who are inclined to agree. There are quibbles about whether Ed Miliband's call for a fresh bonus tax would work as well as a wider levy on the compensation pool, but at least his proposal yesterday responded to the great sense in the country that something must be done. The government, by contrast, has ditched even the modest and ready-made legislation that it inherited to require banks to be open about whom they pay bonuses to.

Transparency is not onerous, and is in line with the tide of global regulation. Yet it has proved too much for the coalition. The people will lack the full facts, but will nonetheless know enough to feel fury. Politicians must keep sight of other objectives, such as encouraging lending and the value of nationalised assets, so fixing the problem is not a simple thing to do. But done it must be. If a blind eye is turned to the blind rage, the politicians will pay a price.