'Obscene' move to lift cap on bankers' bonuses amid cost of living crisis

24 October 2023 , 20:12

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Bonuses for bankers are back on (Image: Getty Images)

The cap on fatcat bankers’ bonuses will be lifted this month, City watchdogs have confirmed.

There was widespread condemnation of the move, with TUC General Secretary Paul Nowak especially furious. He blasted: “This is obscene. City financiers are already enjoying bumper bonuses. They don’t need another helping hand from the Conservatives. At a time when millions are struggling to make ends meet, this is an insult to working people.”

In an attack on the Prime Minister, he added: “ Rishi Sunak has shown once again that he is more interested in feather-nesting the super-wealthy than helping struggling families.” Darren Jones, Labour’s shadow chief secretary to the Treasury, added: “This decision tells you everything you need to know about the priorities of this Government.”

Luke Hildyard, executive director of think tank the High Pay Centre, joined in the condemnation: “The UK already has more millionaire bankers than the whole of the EU put together yet our economy is stagnant and our public services are in crisis. We can’t rely on the outsized incomes of a handful of super-rich bankers trickling down to lift slumping living standards for the general population.”

Former Chancellor Kwasi Kwarteng (Daily Mirror/Andy Stenning)

Christina McAnea, general secretary of UNISON, echoed this, saying: “Anyone who thinks that making bankers even richer will achieve anything positive for the country is utterly deluded.” The unlocking of further riches for bankers was announced on the day the Joseph Rowntree Foundation revealed the numbers living in destitution in the UK soared 61% to 3.8 million from 2019 to 2022, with a million children now improverished.

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Bankers were paid more than £13billion in bonuses in 2008, on the eve of the financial crisis. The bid to further enrich the UK’s bankers was announced by former Tory Chancellor Kwasi Kwarteng last year as part of a post-Brexit shake-up. The cap limiting bankers’ bonuses to twice their base salaries, was introduced in 2014 by the EU.

However The Prudential Regulation Authority yesterday backed lifting it, insisting: “Regulators consider growing evidence has emerged of undesired consequences of the rules on firms’ safety and soundness and UK competitiveness.”

Graham Hiscott