Osborne has convinced everyone... except Conservatives |

Monday 26th October 2009 | 14:18

Osborne has convinced everyone... except Conservatives

MPs, journalists, thought leaders and strategists across Westminster support Osborne's ban on bank bonuses - except Conservatives. There is widespread doubt about the ability to redirect the funds to lending.

Political insiders have backed George Osborne’s call for a limit on High Street bank bonuses – but right-aligned insiders are not convinced by the plan.

The Shadow Chancellor, speaking to an audience at Reuters in Canary Wharf, said banks with a retail lending arm should be banned from handing out bonuses of more than £2,000 in cash – suggesting larger sums should be in the form of shares in the company.

PoliticsHome regularly surveys a broad group of senior MPs, peers, journalists, strategists and thought leaders, to bring a unique insight into Westminster opinion.

Lack of support on right

Overall, 55% of the Phi100 panel supported Osborne’s proposals, but this figure fell to just 40% of right-aligned insiders.

"It's astonishing that the Conservatives should be so far ahead of Labour on this issue!", said a left-aligned think tank leader.

“I approve – only on political grounds” said a right-leaning strategist, whilst a left-aligned thought leader agreed, “It’s a token gesture”.

“The limit should only apply to banks that have had a direct government bail out”, a political journalist said.

A Conservative-leaning journalist said, “It seems like a rather meaningless gesture. Banks aren't lending money because they are afraid of risking their liquidity not because they are handing out small bonuses to high street managers.”

Not convinced plan will work

Despite the general support for Osborne’s plan, the Phi100 are not convinced the plan will achieve the stated objective – funds that would have been paid out in bonuses explicitly diverted towards providing additional new lending capacity.

69% said they were either ‘not very convinced’ or ‘totally unconvinced’ the Treasury and FSA would be able to achieve this shift if the policy were brought in.

A political journalist commented, “I’m not very convinced. A new code of conduct has already been agreed by banks anyway.’

"This should all have been agreed at the time when the banks were rescued”, said another.

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