Don’t believe in trickledown economics? Consider the parable of the Chelsea nanny

Peter Hain says two thirds of City bonuses should be redirected to charity, or employers who dish them out should face tax penalties. David Cameron is trying to find a formula to suggest he disapproves of City greed while signalling that the City need fear no tax-grab from him. Those who find the disparity between bankers’ pay and everyone else’s morally repugnant, or at least uncomfortable, often also cast doubt on the ‘trickledown’ theory — that the wider economy benefits efficiently from the lavish spending of the lucky few. Such sceptics should consider the parable of the Chelsea nanny.

A City friend who used to negotiate remuneration deals for bonus-hungry equity salesmen gave me a vivid account of an even more bruising recent negotiation: with the Slovakian girl who looks after his children. He lives in SW10, a district which is not only popular with investment bankers but also feels the warm breeze of rouble wealth from the nearby football club.