Darling questions bumper City bonuses

17/02/2008 23:31

LONDON (Reuters) - Chancellor Alistair Darling criticised the size of bonuses paid in the financial services industry saying most people in the country were "fed up" with the large payouts.

In an interview with The Daily Telegraph published on Saturday, Darling said he was not advocating higher taxes on the super-rich. But he said they should think about donating money to help those less fortunate than themselves.

Under a decade of rule by former Prime Minister Tony Blair, the Labour government abandoned some left-wing policies, encouraged businesses and steered clear of criticising wealth.

"People get fed up if they see others getting great big bonuses and they can’t actually see what they did. It can be extremely frustrating," Darling was quoted as saying.

"Boards need to ask themselves, ’Are we behaving responsibly?’"

London is Europe’s leading financial centre and employs hundreds of thousands of people. An estimated 7 billion pounds in bonuses will be paid out in early 2008.

Darling said it was to hard to take such huge bonuses when the economy was heading into a "very difficult year", with slower growth and higher food and energy prices.

"Can you say hand on heart this is the right thing to do? If you can’t justify it to your next door neighbour you should think .....continued below

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again," he said. "I would like to encourage people who are in a position to do so to donate more to the public good."

Since succeeding Prime Minister Gordon Brown as chancellor of the exchequer, Darling has come under fire after the first run on a major bank in over a century, for potentially alienating rich foreign residents with new levies, and watering down reforms to capital gains taxes.

Darling admitted he had had some "robust exchanges" with Brown since taking over but did not think he was the "fall guy".

The run on mortgage lender Northern Rock has contributed to a slide in Brown’s popularity in recent months and according to a recent opinion poll voters now trust the Conservative Party more on economic issues.

The government said this week it would press ahead with a levy on wealthy foreign residents who have so far been able to legally avoid paying tax in Britain, despite claims from a minister that it would drive away investment.

Darling is due to present his first budget next month and made clear he was not planning to ramp up duty on alcoholic drinks to curb binge drinking in the country, the paper said.

"I don’t take the view that the best way to deal with this is to punish everybody for the sins of the minority," he said.

(Editing by David Clarke and Mary Gabriel)

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