The new chancellor wants to scrap the cap on bankers’ bonuses, in a move that could further widen the gulf between rich and poor as recession looms.
The cap was introduced after the 2008 financial crash – as part of moves to reduce the risk-taking that caused it – but Kwasi Kwarteng believes the rules make it harder to attract top staff to the City of London.
The Treasury says no decisions have been taken and Boris Johnson backed away from taking the step because he feared the political backlash during the cost of living emergency.
Keir Starmer had accused the then prime minister of “rolling over”, describing the idea of removing the cap as “pay rises for bankers, pay cuts for district nurses”.
The curb, introduced in the teeth of UK opposition by the EU in 2014, requires bonuses to be limited to no more than 100 per cent of fixed pay, or double that with shareholder approval.
If bonuses are uncapped, it would come as millions of workers, especially in the public sector, face real-terms pay cuts as wages fail to keep pace with inflation set to top 10 per cent.
Mr Kwarteng is anxious to boost London’s competitiveness against New York, Frankfurt, Hong Kong and Paris, according to people briefed on the discussions who spoke to the Financial Times.
One financial executive said scrapping the cap would be a “clear Brexit dividend. Something you can present as a win”.
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Kaynak: briturkish.com
