Unlike the rest of the population I am not a fan of the government’s recent tax on banks. I feel it is too needy and will, like most taxes, reduce the tax take rather than increase it. I am especially against the EU’s attempts to put a cap on bankers bonuses and feel that any business should be concerned about such legislation.
As a business owner it is my prerogative to decide how to reward staff and should have nothing to do with government policy. Appreciate it is just the finance sector at the moment but it could very well be any other industry in the future. The fact is if I decide to pay staff using a generous commission structure, even if the industry as a whole doesn’t, then that shouldn’t be anyone else’s business. My thought process is a well incentivised sales person offers our clients better service and help to ensure the success of the company. If the banks feel the same then it shouldn’t be down to government to decide best practice.
Instead government, and more importantly the busy bodies in Europe, should be concentrating on putting restrictions in place on the industry as a whole. I believe that by requiring banks to hold a certain amount of their trades as deposits (or by increasing that threshold) they will be less likely to fail as there would be something to fall back on during a recession. Also by reducing the amount of readily available cash in the business, less will be likely to go to staff in the form of bonuses.
This kind of regulation is very much a low touch policy which still instils entrepreneurship and the desire to grow but should fix big problems in our society. It is, for example, a travesty that parts of the country are already suffering from a hosepipe ban when the water companies should have been investing for the last two years in more capacity. Again regulation stipulating the amount of water to have in reservoirs for each citizen would ensure supply during times of drought.
So my message to government is no need to tax or mess with individual businesses, just provide clearly defined regulations which protect the wider economy.