Blog:MPs prepare to question Darling on bankers’ bonuses and state borrowing
Bankers’ bonuses and spiralling government debt remain under the glare of the spotlight this week as Alistair Darling faces fierce questioning by MPs over his Pre-Budget Report (PBR).Mbt
The Chancellor’s appearance before the Commons Treasury Select Committee comes amid reports that company directors are fleeing Britain to avoid the 50 per cent tax rate, bankers are seeking legal advice on privacy and Barclays is to defer bonuses for a year to try to beat the new windfall tax.
The committee, which will question Mr Darling on Wednesday, will prepare for the hearing by questioning economists today and senior Treasury officials tomorrow.
John McFall, the committee chairman, said yesterday: “We will be asking the Chancellor about the deficit, and his plans to reduce it. In terms of bankers’ bonuses, we would have liked a change to long-term remuneration packages, rather than just a one-off tax.”
The hearing comes two days before official figures are expected to Shoes Mbt show that government borrowing surged again in November. Some economists believe that the Government may have been forced to borrow as much as £23 billion in November because of plunging tax receipts and soaring benefits bills. This would be more than double the £11 billion that it borrowed in October and would take the Government’s total borrowing since April to £116 billion.
Mr Darling was forced to revise up his forecast for total borrowing this year in the PBR, although by less than many economists had expected.
He has now pencilled in borrowing of £178 billion in the year to April, up from his initial estimate of £175 billion in April’s Budget. Some economists forecast that total annual borrowing could reach as high as £200 billion.
Although Mr Darling has pledged to halve discount Mbt shoes the annual deficit in the next five years under the terms of his new fiscal responsibility rule, experts in the Institute for Fiscal Studies last week poured scorn on the legislation, branding it “not sensible”. Mr Darling also came under fire after the PBR for failing to give enough detail about how he was planning to reduce the country’s debt, which is at its highest since 1946.
However, fears that Britain could lose its coveted AAA credit rating immediately were eased last week after Moody’s, one of the three main ratings agencies, said that it was unlikely to change Britain’s rating soon, although it warned that, if the country could not keep its finances under control, it could face a downgrade by 2013.
As the ratings agencies assess whether Britain is a good financial risk, Barclays is rethinking its plan to raise base pay by 150 per cent because of fears that it could contravene the Government’s new bonus tax.Mbts It will defer up to 60 per cent of bonus payments this year.
Bob Diamond, the president of Barclays, who was paid more than £20 million in 2007 but waived his bonus last year, refused to be drawn on whether he would repeat the move this year.
Interest in the fine detail of bankers’ pay has reached such proportions that the number seeking legal advice about privacy has risen sharply.
Carter-Ruck and Schillings, legal firms that specialise in defamation, privacy and reputation management for the likes of Madonna, J. K. Rowling and Cristiano Ronaldo, report that there has been a significant increase in London bankers seeking advice.
Bankers have claimed that their private lives Mbt trainers have been under surveillance, their wives and children followed and their rubbish sifted.
