04/03/2013 06:07 GMT | Updated 03/05/2013 06:12 BST

Boris on Bonuses: Like Swiss Cheese, Full of Holes

The head cheerleader for London's banking industry, Mayor Boris Johnson, says that the EU's "deluded, self-defeating" cap on bankers' bonuses is a boost for "Zurich and Singapore and New York."


In Switzerland.

A nation who's voters have overwhelmingly backed stringent curbs on executive pay, payoffs and - yes Boris - even bonuses in certain circumstances.

Coming days after RBS announced a £607m bonus pool to "reward" staff for losses of £5bn, Boris' defence of the banking industry is in itself deluded - and as far as the UK economy is concerned, self-defeating.

Yes there should be a debate on whether the Swiss rules or the EU cap represent a better way of bringing remuneration more into line with risk and performance - a debate that City AM Editor Allister Heath makes an uncharacteristically salient contribution to - but to dismiss the EU's rules as crassly as Boris has is foolish.

But wait, what does Mr, Balls think? Ed Balls must, I fear, side with Mr. Johnson on this matter - for any cap on bonuses would surely deprive a Labour government of the source of taxation upon which their plan for economic renewal is based? Surely Mr. Balls wants the bonuses that distort incentives, drive extreme income inequality and divert talent from the productive economy, to continue to be paid, as they form such a key part of his tax base?!