An excellent rant from Philip Stephens in today’s FT. The Vickers commission has clearly been worn down by months of relentless lobbying from the banks, and as a result has almost nothing to say about the grotesque rewards that bankers have come to expect as their due. If the new ring-fencing works, and makes banking into a utility with salaries and bonuses to match, then perhaps some of these undoubtably very talented executives would go and do something more socially useful.

Their defenders (very few bankers are prepared to defend the scale of their rewards in public) have concentrated on the terrible burden of the 50% top rate of income tax. DeAnne Julius was brave to face the BBC following her letter to the FT, but her argument was as thin as a banker’s smile, as she struggled to find any evidence to support it. The political cost of cutting the rate would be ruinous, at a time when we’re all supposed to be in this together. Whether or not it brings in extra revenue is irrelevant as long as austerity lasts.

The far bigger problem is the increasing gap between rich and poor, as globalisation concentrates ever-greater rewards on the winners at the expense of the losers. This is a widespread phenomenon, recently skewered in the Wall Street Journal (HT Reuters’ John Kemp) and reflected in the burgeoning fortunes both of swanky brands and bottom-of-the-range retail outlets. Taxing the rich to give to the poor is the obvious way to try and offset this trend, but as we have seen in the west, it doesn’t seem to work too well.

Welfare breeds dependency on the state, while third world producers are increasingly setting the price for unskilled and semi-skilled labour. When (if?) the current banking crisis passes, the problem of finding meaningful work for those at the bottom of the employment heap will come to the top of the political worry list. Those bankers will be paying 50% on their precious bonuses for a while yet, and quite right too.