Darling to speak on bonuses and the City

There are some monster bonuses coming down the tracks in the City and the government is trying to get its defences in place.

Alistair Darling will today tell the conference here that he’s going to talk to the bankers and tell them to restrain themselves this Christmas.

There’s a new law in the offing but it won’t be ready in time. It would defer bonuses and only allow them to be paid when the assets traded have made money, not crashed.

The financial industry was probably responsible for something like £7bn in bonuses before the crash. We are potentially looking at comparable, mighty sums being paid out this year.

The government argues they’d be getting that money not because of any great achievements on their part but because the government has put public money into the banking system.

You can see how high the stakes are and why Gordon Brown and the Chancellor are upping the rhetoric. But Alistair Darling remains opposed to “naming and shaming” individual bankers and opposed to capping.

So where is the giant chasm between the parties that Peter Mandelson has been talking about this morning? The Tories are doing their best to make sure no chasm is detectable.

They say they’re signed up to the G20 communique that is being taken as the basis for bonus regulation here but they will only decide whether they are supporting the government when they see the detail of what is going to be a very complicated piece of City regulation.

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