GUEST COMMENT: The City need not fear the Lib Dems
As the election result draws near and it appears increasingly likely that the Lib Dems may hold the balance of power in a hung parliament, City workers are having to dust off the third party's manifesto in a desperate attempt to see if their livelihoods are threatened.
The Lib Dems, via their vociferous treasury spokesman Vince Cable, have been virulent critics of the City and its excesses though, of course, most politicians realised long ago that no-one ever lost a vote by bashing the bankers!
Some of the Lib Dems policies do sound a little worrying. Making sure bank's board members are not allowed to receive bonuses (as they apparently encourage short-term thinking), not allowing cash bonuses above 2.5K (only equity), preventing loss-making banks from handing out bonuses and naming all employees who earn more than the Prime Minister (a measly 200K!) could make some City workers consider the merits of moving to Switzerland.
The Lib Dems have also talked about a 10% tax on banking profits and the possibility of imposing Glass-Steagall type banking reforms (that split 'conventional' banking and the 'casino activities' of investment banks). They have also stated that they are willing to move unilaterally on these measures if the other G20 members moderate their previously radical proposals.
However, I would be surprised if a Tory/Lib Dem or Labour/Lib Dem government proves as anti-City as many fear.
The fact is that 'extreme policies' are often watered down once a party reaches power and the realities of Government impose themselves. Secondly, the Tory or Labour side of the government are likely to further de-radicalise the Lib Dem proposals. Let's also not forget the City lobbying machine that will do everything in its power to maintain the status quo and that the Government will have certain other more pressing matters to deal with over the next months and years.
The Lib Dems may sound a bit scary but what they promise and what they deliver, as with most politicians, are likely to be two very different things. No-one wants to kill the goose that lays the golden eggs and the City can hand out as much as 26bn in corporation and income tax annually. That's why City workers shouldn't be buying that one-way to ticket to Zurich just yet!
Geraint Anderson is author of 'Cityboy - Beer and Loathing in the Square Mile'
