We should all have a say on what bankers earn


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The Independent Online

Outlook Some of the former Downing Street adviser Steve Hilton’s ideas have been wacky, some have been positively dangerous, but he’s had some good ones too. Take his latest: suggesting that top bankers should trade in their seven-figure salaries for the (low) six figures commonly paid to top civil servants.

Cue howls of outrage from the British Bankers Association, which aired the usual dire warnings about the impact of such a move on one of the UK’s “key industries”. It also snidely suggested that Mr Hilton’s aim in making a such a pronouncement was to promote his latest book. Plus ça change, you might think.

The problem for the BBA is that Mr Hilton’s idea is not only popular, it’s also very logical: banks are underwritten by the state. As a certain Barack Obama once noted, their profits might be privatised but their losses are socialised, and even with the many sensible regulatory reforms that have been enacted that fact hasn’t changed. If a big bank goes down in future we’ll all be on the hook. So we deserve a say on issues such as pay, which needs to come down.

It’s not all bad for the bankers: if you extend Mr Hilton’s ideas to their pensions and hand them the copper-bottomed arrangements enjoyed in Whitehall, they’d retire quite comfortably. More to the point, however, their institutions would probably be run more sensibly and conservatively, to the benefit of all of us.

The only problem with Mr Hilton’s thinking is this: given the depressing venality evident in British public life, how long can it be before top civil servants turn his idea on its head and start asking to be paid like bankers?