Delayed bonuses 'avoids real issue'

MPs and officials alike tutted today over rumours the investment bank planned to put off paying executives their bonuses until after Chancellor George Osborne's top-rate tax cut from 50 per cent to 45 per cent comes into effect in April.

The rumours set tongues wagging in Parliament.

The Bank of England's outgoing governor Mervyn King told MPs that the news was "depressing" and the public accounts committee's chairwoman Margaret Hodge alleged that bankers believed it was "cool not to pay tax."

At the time of writing the BBC's business editor Robert Peston said the firm had decided not to defer the bonuses.

But tax expert Richard Murphy said the fixation on Goldman Sachs missed the real scandal - that they were getting the tax cut at all.

There was no point in Sachs and others stoking public ire when Mr Osborne had ensured their tax cut "come hell or high water," he said.

Nor was there was no sense in expecting Mr Osborne to condemn such ploys when he intended to reduce their obligations anyway.

"It reflects a failed idea of trickle-down taxation that if you keep the rich happy, a rising tide lifts all boats.

"In fact it sinks all ships," Mr Murphy said.