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Gordon Brown promises to attack the UK bonus culture

As the pressure continues to mount on the UK government, with regards to the substantial bonuses recommended by various banks under taxpayer control, the PM Gordon Brown has vowed to "sweep away" the bonus culture in the financial sector. In a move which is aimed at strengthening Alistair Darling's announcement yesterday it would appear that the UK government has the financial industry well and truly in its sights. But will this work?

Amongst all of the hustle and bustle of the government's attack on the financial sector, it is easy to forget that the UK economy is based upon a free market. This is a free market which allows private companies to make private decisions on private matters. Once the UK government start to introduce legal obligations with regards to remuneration and other controversial issues, many believe this is the first step away from the free market.

A bonus used to reward somebody, or a group of people, who have performed well should not be considered in the same light as the millions of pounds paid to company directors. However, is it really right for the government to dictate bonus terms and remuneration packages across the UK industry in order to curry favour with UK voters?

Controlling the short-term bonus structure and remuneration of businesses which the UK taxpayer effectively controls is fine, but trying to influence other unconnected parties is a very serious matter.

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