City bonuses need to be curbed, but more tax is not the answer 

One upshot of George Osborne’s and Alistair Darling’s attacks on city bonuses was that the FSA had not gone far enough in trying to curb excessive reward. This morning, the left leaning think-tank Compass and Vince Cable have joined the debate. They suggest that there be a ‘High Pay Commission’, to examine wage ratios within financial institutions, and that the tax system is restructured to close the gap between income tax and capital gains. Cable makes the case in the Guardian, but this paragraph struck me:

‘There is no need for a return to a 1970s-style income policy for top pay – though, of course, the government is indirectly responsible for funding often outrageous quango pay. It should look at the principles and myths about top pay. For example, the FSA is accused of diluting a commitment to curb bonuses that lead to dangerous risk-taking – on the basis that this might affect the “competitiveness” of the City.