Another front page story of significance this morning. Ashely Seagar in the Guardian reports that City bonuses have reached £14 billion this year. He suggests that figure is spread between £1 million people in the finance industry. That's still £14,000 each. But as the distribution is incredibly skewed towards a very few people that hides the fact that many of the bonuses run into hundreds of thousands or millions of pounds.
Two comments. First these people are not worth this much. They really aren't that clever, as recent volatility has shown. If anything, I'd suggest the exact opposite: cleverness is spotting the problems, not following the herd and these people have been very good at just out-performing the pack, at best.
Second, ask who pays these sums. The answer is you do. Tax relief on pension contributions in the UK are £16.3 billion this year implying contributions of about £50 billion. Actually, the cost of relief is understated as for perverse reasons the tax paid on pensions is offset against it (which is bad accounting by HMRC) so that should be inflated. Given that average pension income is relatively low, let's make the adjustment £5 billion. So pension contributions, assuming an average relief rate of 30% might be about £70 billion.
Think how much of that sum is used to pay City bonuses. Too much.
No wonder we have a pensions crisis in this country when 70% of all we save is placed in equities, the very instrument that the City abuses to pay these bonuses.
The simple fact is that the financial services industry is not about achieving long term value for those who provide it with funds. It's about achieving short term value for those in the financial elite who have hijacked the funds others have saved to provide themselves with an unethical reward.
And then we fail to tax them on those sums appropriately. The whole system is one designed to abuse. In fact it might be said that:
Never in the field of human saving has so much been taken from so many by so few.
And as George Monbiot notes in this morning's Guardian, this is not by chance. This is by design.
Thankfully when it comes to pensions there is alternative thinking. It's about time someone listened.