Home > Political equality and influence > Bankers, bonuses and political influence

Bankers, bonuses and political influence

Large businesses and wealthy individuals have a number of advantages when it comes to influencing politics. Without spending their own money on political campaigns or lobbying firms, those businesses and individuals are seen to enjoy a special status in the political system and receive greater attention from politicians on account of their potential impact on the economy. Yet to read the newspapers recently, you may be tempted to dismiss such claims. It is reported that the Chancellor is considering a windfall tax on bankers’ bonuses in the pre-budget report tomorrow. Far from giving those businesses a special status, politicians are inclined to give the opposite appearance by telling bankers ‘to come back into the real world.’

The obvious explanation is that the current economic climate and the banking crisis, combined with the proximity to a closely fought general election, creates an exceptional set of conditions in which both political will and political pressure go against the interests of the bankers and other large businesses. An election year is like no other, so maybe the special status of certain businesses or individuals is curtailed. The measures being proposed today may also follow from the various advantages those economic actors enjoyed in previous years – so the policies today are still shaped by the special status of the past.

The response to the proposal is also telling. While some contest the fairness of the tax measures and question whether it will raise much money in any event (both of which are fair points for debate), much of the response focuses on the economic harm that could be brought about if companies move to other countries. On the Today programme this morning, an item discussed the potential exodus from Britain if the tax on bonuses goes ahead. Yesterday the Guardian reported that companies were threatening to leave (or had already had left) the country following moves by Revenues and Customs to prevent loopholes being exploited by companies claiming to be based outside jurisdiction. The extent to which such threats are likely to be carried out is uncertain. However, the problem is that the argument is not concerned with the unfairness of the tax, but is a simple attempt to apply pressure through economic power.

That such a reaction is advanced as an argument and carries any weight in the debate highlights that the special status still exists. This does not mean that those large businesses always get their way, but that their own interests can command greater attention.

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