Justin Tackett

The government is ready to tighten laws to curb City bonuses in a bid to prevent bankers from taking excessive risks, Alistair Darling has said.

The chancellor told the Sunday Times he was "quite clear" large rewards for bankers had encouraged risk-taking and contributed to the current crisis.

He said he understood public anger over the issue and if tougher legislation was required ministers would act.

The Tories have also said they would seek an end to bank big bonus culture.

Under Treasury plans, the banking regulator, the Financial Services Authority (FSA), would be given powers to control bonuses in all banks, a move which is likely to require new legislation.

New rules

"If we need to change the law and toughen things up, we can do that," Mr Darling said.

"I'm quite clear that some of the problems we have today were caused by the fact that some traders were incentivised to take risks which neither they nor their bosses fully understood."

The new rules would cover the whole of the banking system not just those institutions that are part-owned by the taxpayer, such as the Royal Bank of Scotland (RBS) and Lloyds.

"The public is rightly concerned because the taxpayer has had to stand behind a number of these banks, and the whole banking system in effect"

Chancellor Alistair Darling

Mr Darling's announcement follows criticism of the FSA over its perceived failure to take a tougher stance on bonuses.

It has issued a new code stating awards should be linked more closely with the long-term profitability of banks and that they should not be guaranteed for more than a year.

But Mr Darling said more action was to come.

"The public is rightly concerned because the taxpayer has had to stand behind a number of these banks, and the whole banking system in effect," he said.

"So people want to make sure we don't get ourselves into this situation again. The FSA code is only part of our approach."

'Unacceptable'

He said he was not against bonuses that rewarded "good behaviour and long-term growth", but they needed greater regulation.

"What you can do is make sure you don't get yourselves into a situation where firms actively have a pay system that results in them being exposed in a way that led to ruin, which it did in a number of cases," he added.

Mr Darling did not stipulate whether he would cap bonuses or ban those that had a guarantee.

Ministers are currently waiting for the delivery of an independent review of bonuses and corporate governance by Sir David Walker, former chairman of Morgan Stanley, before introducing new laws.

Shadow chancellor George Osborne revealed on Saturday a Conservative government would also seek to stop the payment of large bonuses across the banking system.

He told the Guardian that handing out big awards backed by state guarantees was "unacceptable", even for banks that were not part-owned by the taxpayer.

The Tories would also scrap the FSA and hand its powers to a strengthened Bank of England.

However, the British Bankers Association (BBA) has said pay rules are already "more stringent" in the UK than in any other country.

By Helen Grady
Producer, Beyond Westminster

Every year millions of pounds are spent by local councils on evicting Gypsies and travellers from illegal camp sites. The government thinks the answer is to create more authorised sites, but who should decide where they go

Len Gridley has some problems with his neighbours. The first is that there are 1,000 of them. The second is that they have set up what has become Europe's biggest illegal traveller site next to his back garden.

"All I want is for the council to clear the site," said Mr Gridley as he showed the 8ft fence he has fitted to separate his garden from his neighbours' homes.

"Who wants to live next to a Gypsy and traveller site My house used to be worth £500,000 and now it's worth £150,000. No one wants to live here. People have sold up at a loss just to get away."

The site is in Cray's Hill, a picturesque village in the Essex countryside, which has become the focus of a planning row that is likely to cost the local council £3m.

Illegal settlement

The site backing onto Mr Gridley's bungalow is known as Dale Farm. It is owned by Gypsies and Irish Travellers, some of whom have been living there since the 1970s.

Grattan Puxon, a spokesman for the Dale Farm Residents, said the site expanded after some families bought an old scrap yard adjoining the original site. "As the families got bigger, they believed it was a quite a reasonable idea to clean up the old scrap yard and move onto it," he explained.

"This is somewhere for us to live, plus somewhere for us to get our kids looked after in the lines of doctors and dentists and education "

Jean Sheridan, traveller

But only half of the Dale Farm site has planning permission and more than 400 people are facing eviction following a ruling by the Law Lords in May.

Basildon District Council, has spent almost £1m on the legal battle to evict the Travellers and set aside another £2m to pay for bailiffs to clear the illegal section of the site.

Council leader Tony Ball said it was worth the cost, adding "It's quite clear - they are living on green belt land without planning permission. UK law says that site has to be restored to green belt. What price upholding the law The alternative is anarchy."

But families at Dale Farm claim they have nowhere else to go. And, although they are travellers by birth, they say they need a base.

"I don't know how to read or write," said Jean Sheridan, a mother-of-four. "I've been brung up like a proper traveller - travelling from site to site and on the roads constantly, so I never got the chance to go to school and get an education.

"This is somewhere for us to live, plus somewhere for us to get our kids looked after in the lines of doctors and dentists and education and things like that."

"I'd be happy to move if they could find us another site," added a neighbour, who asked not to be named. "But nobody wants us, so where are they going to put us"

Political dilemma

That is a dilemma politicians have been grappling with for decades. So far, a solution seems elusive. Although most Gypsies and travellers live in authorised sites, it still costs councils in England at least £18m a year to evict people from illegal sites.

FIND OUT MORE...

• Beyond Westminsteris broadcast on BBC Radio 4 on Saturday 1 August 2009 at 1100 BST
• Catch up later on the BBCiPlayer
• Or download the programmepodcast

The government thinks the best way to cut these costs is to create more authorised sites and is offering councils £32m each year in grants for these sites.

There is some evidence to suggest this approach could work. Kent has 17 council-run sites across the county and has slashed its eviction costs by 80%.

But other local authorities have proved reluctant even to identify Gypsy and traveller sites, never mind creating council-run ones.

In England, each region must agree how many sites each local council will set aside for Gypsies and travellers in a document called the Regional Spatial Strategy.

However, some councils are threatening to take legal action rather than agreeing, even in principle, to provide what they see as "more than their fair share."

Candy Sheridan, a Liberal Democrat councillor in North Norfolk and a member of an Irish Traveller family, said a big part of the problem is that even authorised sites are unpopular with the settled community.

"There is no ideal site," said Ms Sheridan. "I sit on a planning committee and whenever the word Gypsy or traveller comes in, you get hundreds of people coming to public meetings and everybody is goaded up to say no to planning permission.

"Councillors who have signed up to creating new sites have lost their seats. What you have to do is take the responsibility away from local politicians."

At the moment, even though councils must assess the housing needs of Gypsies and travellers and have a strategy for meeting those needs, there is no legal duty to provide sites.

Labour MP Clive Betts, a member of the Communities and Local Government Select Committee, thinks that should change.

He told the BBC: "I think a lot of local authorities would welcome a statutory duty to have to do something because at least then they can go to their residents and say, 'we have to do something, let's find the best sites'."

Extra sites

But shadow local government spokesman Bob Neil said such decisions should be made at a local level and that the Conservatives would scrap the Regional Spatial Strategy.

Meanwhile Basildon District Council is advertising for bailiffs to evict the illegal Dale Farm residents and councillors are resisting calls to provide an extra 60 Gypsy and traveller pitches as part of the Regional Spatial Strategy.

Said Coun Ball: "If every authority in the country took an additional seven pitches that would deal with the demand that's out there at the moment.

"We would take seven extra pitches. But it is inequitable that, while Basildon already provides a 100, some are not providing any."

Beyond Westminsteris broadcast on BBC Radio 4 on Saturday 1 August at 1100 BST. Or listen again via the BBCiPlayer.Or download the programmepodcast.

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Should Gypsies and travellers be housed on official sites funded by the taxpayer Who should decide where they go - councils or Central Government Are you a traveller Do you live near an authorised site for travellers or an illegal camp Send us your comments by filling in the form below.

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All charges against Linfield footballer William Murphy have been dropped.

He had been accused of passing counterfeit money in Spain and was on bail.

He had been arrested earlier this year in Torremolinos on suspicion of having brought counterfeit money into Spain on a previous visit two years ago.

He had strenuously denied the original accusation, of bringing counterfeit money into the country, which carries a minimum prison sentence of eight years.

Mr Murphy said: "I am delighted that the charges have been dropped and I can now get on with my life."

A statement from Murphy's solicitor is expected this afternoon.