Labor won't reinstate caps on bankers' bonuses, Rachel Reeves promises

Ms Reeves said she wanted to be «a champion of a successful and thriving financial services industry in the UK»; Photo: Stefan Wermuth/Bloomberg

Labour will not reinstate the cap on bankers' bonuses despite previously criticizing the move, Rachel Reeves said, prompting claims of «spanking on steroids».

Shadow The chancellor said she has «no intention» of bringing back the cap introduced by the EU after the 2008 financial crisis to curb excessive risk-taking by city workers as she wants to keep the industry «prosperous.»

Plans to scrap the cap on twice a banker's annual salary were first announced by Liz Truss chancellor Kwasi Kwarteng in 2022 and put forward by his successor Jeremy Hunt.

Mr Kwarteng said the move would encourage global banks to create workers places, invest and pay taxes in the city, warning that the cap on bonuses leads to higher base salaries and encourages activity outside Europe.

Last October, as the reforms came into force, Ms Reeves criticized the decision on Twitter, saying lifting the cap during a cost of living crisis «tells you everything you need to know about this government».

< p>Share article warning the TUC that scrapping the cap would promote a «greed is good» culture She tweeted: «Today — in the midst of a cost of living crisis — the Conservatives are scrapping the cap on bankers' bonuses.» /p>

“It will tell you everything you need to know about this government.”

Labour is approaching the “dog food lasagne.”

But she has now said she will not reverse the changes as she wants to champion a «successful and thriving financial services industry».

Andrew Griffith, the science secretary, accused Ms Reeves of «spanking on steroids», adding : “How can any business know where they stand under Labour’s leadership? Which Rachel will appear and when?

He compared Labour's approach to financial services to «dog food lasagne.»

He tweeted: «While any U-turn to copy our reforms is welcome, Labour's approach to the UK's financial services sector is dog-like.» food lasagne: looks about the same and may even be misleading to some people, but you wouldn't prefer it!»

Ms Reeves, a former Bank of England economist, told the BBC: «The limit for bankers» bonuses were introduced after the global financial crisis, and it was the right decision to restore public finances.

«But that is no longer the case, and we have no intention of bringing it back. And as Chancellor of the Exchequer, I would like to be a champion of a successful and thriving financial services industry in the UK.”

Stephen Flynn, leader of the Westminster party of the Scottish National Party (SNP), also spoke out against Labor for change. on position.

Alongside a screenshot of Ms Reeves' tweet last year, he wrote: «It took Labor three months to back the Tories on this issue.»

«That tells you everything . you need to know about the Labor Party.»