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Capping bankers’ bonuses: is that a promise, Ed?

Getting one banker voluntarily to forego one bonus, one time, is the easy bit. But taking on the entrenched enrichissez vous ethos that pervades the financial sector will not be achieved by moral suasion alone.

Don’t get me wrong, Ed Miliband has handled the Simon Hester affair in a manner that compensates – well, ever so slightly, perhaps – for the self-inflicted damage brought about by the Labour leadership’s accommodation to austerity.

Faced with the prospect of a Commons vote on the morality of the boss of a state-owned bank awarding himself a million quid bonus after thrashing the share price and dumping a large chunk of the workforce on the dole, the Royal Bank of Scotland chief executive has suddenly decided he could bump along without the money after all.

Ignore the anguished squeals of ‘vilification’ and ‘witch hunt’ emanating from the usual suspects. If these people are not entirely aware of the extent of the public anger directed against them, then the private jets and the superyachts really are insulating them from reality.

Last weekend’s small victory has handed Miliband the tactical initiative, and Ed has taken advantage of it by urging a change in the way all banks, public and private alike, remunerate senior staff.

This morning the BBC is quoting him as saying: “Let’s change the rules on corporate governance so that, let’s say, if you are paid a bonus it’s for exceptional circumstances … The culture right across the city has to change and we’ve got to put in new rules.”

New rules, you say? Either that is a firm commitment to some sort of binding cap on banking bonuses, or I simply haven’t spotted the wriggle room. But to take Miliband’s words at face value, he appears to accept the intellectual case for a government-imposed limitation on the maximum amount that private companies can elect to pay their employees. That is something that would have been unthinkable under either Blair or Brown.

The end of Labour’s embarrassing schoolgirl crush on the super-rich hasn’t come a moment too soon. My only hope is that Miliband will not succumb to the inevitable forthcoming free market propaganda blitz and sticks firmly to the stance.

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