City pay is no side issue: it’s an affront to society

Roger Bootle says it’s wrong to argue that bankers’ bonuses are the price we have to pay for economic success

The smart thing to say — indeed, Allister Heath said it in last week’s issue — about bankers’ pay is that it doesn’t really matter: it’s a distraction from more serious concerns about regulation or the structure of the financial system. Supposedly, people who express amazement and disgust at what bankers receive are motivated by feelings of envy, and they just don’t understand the way the City works. If a bunch of bankers makes a few hundred million pounds or dollars — it hardly matters which currency the amount is denominated in — by trading options on the volatility in the dingbat, that’s fine. In fact, so much the better for the rest of us because this creation of wealth will benefit us all. Extra taxes will be paid and extra demand created.