Michael Spencer: Britain needs these big payouts
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.High pay is good for Britain. In fact it is more than good, it is vital. The simple fact is that the top 1 per cent of earners take home 13 per cent of all the salaries, but pay 28 per cent of all the income tax.
For every £1m bonus paid in the City, the taxman benefits to the tune of £658,000 through national insurance and income tax payments – almost two thirds of it. That makes billions available to pay for schools, hospitals, policemen, the armed forces and welfare. The City of London is the nation's highest export earner, and contributes £63bn in taxes. The most vulnerable in society depend on the continuing success of the better off – as it should be.
As a result, the current witch hunt against banks and compensation threatens to do tremendous damage to our country. Many of the highest paid in the City were not born here but have chosen to live and work here and pay UK tax. Even those who are British tend to be highly mobile, with skills that would make them welcome in any major capital market centre in the world. Already dozens, if not hundreds of senior bankers and investment professionals have left the City and relocated to Geneva, Hong Kong, New York, Dubai or many other aspiring cities.
Bob Diamond is a widely respected CEO in international banking circles, an American citizen who is leading Barclays effectively. His annual remuneration, detailed yesterday in Barclays' annual report, is heavily performance-driven and has been fixed after enormous process by Barclays' remuneration committee and in consultation with its shareholders, the banks owners.
If, for any reason of politically-motivated pressure or public hysteria, he was bullied out of his earned and contracted compensation it would be a damaging day indeed for the City and Britain as a whole. What signal would it send to financial experts around the world about doing business here?
The debate over executive compensation started with concerns about so-called "payments for failure". Like any businessman and investor I agree wholeheartedly with that. Businessmen and bankers who fail to deliver, lose money or watch while their organisation's profits dwindle should pay with their jobs. Bonuses should only be given to people who genuinely create value.
If we allow the politics of envy to determine pay in the private sector, it will not only drive people away from our shores but it will also dampen ambition and the will to work amongst those who remain. Why go that extra mile if you are not going to be rewarded for it? Why succeed when all you will earn is loathing?
In simple terms, do we really want to push international banks and financial services companies out of London? Do we want to kill the golden goose?
The writer is chief executive of ICAP, the interdealer broker
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments