What is the government’s argument for its inaction on bank bonuses?

Cameron says he will not “take revenge” on bankers with a punitive tax, but fails to explain why.

David Cameron's retreat on bank bonuses has continued unabashed, with a guarantee that he will not "hammer" the banks.

Admitting that some people would be angry over this, he said:

It's about getting the balance right. It's not going to be easy and it won't satisfy everybody. But we've got to try to work for that balance rather than just think, "Let's take revenge on people because they've made us mad as hell."

In words that will sound hollow, Cameron said he understood public anger:

There is part of me, like probably everyone in this room, that thinks, "Right, let's just go after every penny we can get out of those banks, let's tax these bonuses to hell." That would look good for a few weeks.

We want a growing economy which is creating jobs, and that means banks that are lending to businesses. I don't want to just try to win good headlines by saying I'm going to hammer these guys.

It is a strange argument from a man who – as Ed Miliband pointed out at PMQs on Wednesday – was calling for a limit of £2,000 on cash bonuses in 2009. Indeed, his posturing over the banks while in opposition even caused some Tory donors to express their concern publicly.

Yet no one in government has made a clear argument for exactly why paying out large bonuses is so crucial to lending – in fact, as I pointed out earlier in the week, George Osborne argued precisely the opposite when in opposition. Numerous academic studies have shown that bonuses cause excessive risk-taking and reduce efficiency.

Could it have something to do with the party's friends in the City? Figures for April 2010 showed that prominent figures from the financial sector donated £500,000 to the party in the second week of the May election campaign – or a quarter of total donations.

It should come as no surprise that the Conservatives are on the side of the financial sector and big business; but Cameron and Osborne's opportunistic posturing over bonuses while in opposition makes it all the more galling. Let us not forget that the coalition agreement pledges "robust action to tackle unacceptable bonuses".

This presents a dream opportunity for Labour to strike the right note with popular support. For their own sake, someone in government needs to make a clear case for their current course of action – or total lack thereof.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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Want to beat child poverty? End the freeze on working-age benefits

Freezing working-age benefits at a time of rising prices is both economically and morally unsound. 

We serve in politics to change lives. Yet for too long, many people and parts of Britain have felt ignored. Our response to Brexit must respond to their concerns and match their aspirations. By doing so, we can unite the country and build a fairer Britain.

Our future success as a country depends on making the most of all our talents. So we should begin with a simple goal – that child poverty must not be a feature of our country’s future.

The Institute for Fiscal Studies projects that relative child poverty will see the biggest increase in a generation in this Parliament. That is why it is so troubling that poverty has almost disappeared from the political agenda under David Cameron, and now Theresa May.

The last Labour Government’s record reminds us what can be achieved. Labour delivered the biggest improvement of any EU nation in lifting one million children out of poverty, transforming so many lives. Child poverty should scar our conscience as much as it does our children’s futures. So we have a duty to this generation to make progress once again.

In my Barnsley constituency, we have led a campaign bringing together Labour party members, community groups, and the local Labour Council to take action. My constituency party recently published its second child poverty report, which included contributions from across our community on addressing this challenge.

Ideas ranged from new requirements on developments for affordable housing, to expanding childcare, and the great example set by retired teachers lending their expertise to tutor local students. When more than 200 children in my constituency fall behind in language skills before they even start school, that local effort must be supported at the national level.

In order to build a consensus around renewed action, I will be introducing a private member’s bill in Parliament. It will set a new child poverty target, with requirements to regularly measure progress and report against the impact of policy choices.

I hope to work on a cross-party basis to share expertise and build pressure for action. In response, I hope that the Government will make this a priority in order to meet the Prime Minister’s commitment to make Britain a country that works for everyone.

The Autumn Statement in two months’ time is an opportunity to signal a new approach. Planned changes to tax and benefits over the next four years will take more than one pound in every ten pounds from the pockets of the poorest families. That is divisive and short-sighted, particularly with prices at the tills expected to rise.

Therefore the Chancellor should make a clear commitment to those who have been left behind by ending the freeze on working-age benefits. That would not only be morally right, but also sound economics.

It is estimated that one pound in every five pounds of public spending is associated with poverty. As well as redirecting public spending, poverty worsens the key economic challenges we face. It lowers productivity and limits spending power, which undermine the strong economy we need for the future.

Yet the human cost of child poverty is the greatest of all. When a Sure Start children’s centre is lost, it closes a door on opportunity. That is penny wise but pound foolish and it must end now.

The smarter approach is to recognise that a child’s earliest years are critical to their future life chances. The weight of expert opinion in favour of early intervention is overwhelming. So that must be our priority, because it is a smart investment for the future and it will change lives today.

This is the cause of our times. To end child poverty so that no-one is locked out of the opportunity for a better future. To stand in the way of a Government that seeks to pass by on the other side. Then to be in position to replace the Tories at the next election.

By doing so, we can answer that demand for change from people across our country. And we can provide security, opportunity, and hope to those who need it most.

That is how we can begin to build a fairer Britain.

Dan Jarvis is the Labour MP for Barnsley Central and a former Major in the Parachute Regiment.