BRITAIN’S FORMER chancellor of the exchequer admitted yesterday that the UK’s controversial supertax on bankers’ bonuses failed to change the sector’s behaviour over pay, as “imaginative” financiers devised ways to avoid it.
The 50 per cent tax on bonuses of more than £25,000 (€30,700) was deeply unpopular in the City of London, amid complaints that the industry would haemorrhage talent overseas.
Alistair Darling, who introduced the now-expired levy last year, said he thought it was unlikely the tax would be reinstated by the current government. However, he warned the industry that it faced equally unpopular reforms unless it was more sensitive to the public’s concerns over pay and regulation.
“I think it will be a one-off thing because, you know, frankly, the very people you are after here are very good at getting out of these things and . . . will find all sorts of imaginative ways of avoiding it in the future,” he said in London.
His stance was reinforced by the news that Credit Suisse is awarding a one-off bonus to about 400 senior employees in London after slashing its UK bonus pool for 2009 in response to the tax. The new bonus will not be subject to the tax, which expired in April.
