Rachel Reeves says she won't reinstate bankers' bonus cap months after criticism
Labour would not reinstate the cap on bankers' bonuses - despite slamming the Tories for allowing millionaire City workers to claim bumper payouts just three months ago.
Shadow Chancellor Rachel Reeves, who has been on a charm offensive with business, said she had no intention of reinstating limits on payouts for fatcat bankers. "The cap on bankers' bonuses was bought in in the aftermath of the global financial crisis and that was the right thing to do to rebuild the public finances," she told the BBC.
"But that has gone now and we don't have any intention of bringing that back. And as Chancellor of the Exchequer, I would want to be a champion of a successful and thriving financial services industry in the UK."
It comes at odds with her comments in October, where she slated the Tories for the same thing. Responding to claims from the unions at the time that it promoted a "greed is good" mantra, Ms Reeves tweeted: "Today - in the midst of their cost of living crisis - the Conservatives are scrapping the cap on bankers' bonuses. It tells you everything you need to know about this Government."
Keir Starmer also previously told the Mirror: "Removing the cap on bankers’ bonuses when people are really struggling to pay their bills shows the Tories are absolutely tone deaf to what so many people are going through."
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A Labour spokeswoman defended the move and insisted it wasn't a U-turn. She said: "We said at the time we didn't think it was a priority. The decision was taken by the Government and we don't have any plans to bring it back."
Rules brought in after the 2008 financial crash limited annual bonuses at double an employee's salary. But Liz Truss's Government unveiled plans to axe the cap on multi-million pound payouts in her disastrous mini Budget in 2022. The Tories were widely criticised at the time for allowing unlimited payments to the wealthy while ordinary Brits grappled with a cost of living crisis.
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But Rishi Sunak pressed ahead with the plan after Liz Truss's Government collapsed following a markets backlash to her plans for a bonanza of unfunded tax cuts.
Ms Reeves' remarks triggered a backlash from the left-wing of the party. A spokesperson for the Momentum activists network said: "This is a terrible decision totally out of touch with Labour's values and public opinion.
"For over forty years our economic model has sucked wealth from the country & enriched a few in the City. It even crashed the economy in 2008. Yet instead of learning the lessons from New Labour's failures, Starmer & Reeves seem determined to repeat them."
Scottish Labour leader Anas Sarwar, who had previously accused Ms Truss of being a "Thatcher tribute act" who would rather "boost bankers' bonuses than help those in need", refused to criticise Ms Reeves.
He said: "We were right to oppose the lifting of the cap on bankers bonuses at the time. People can see the comments I made at the time, I said it was a further demonstration of an economically illiterate morally bankrupt Tory party. I still believe that." He added: "Look, we're not in government, we didn't make that decision. That's a decision that they have made now. I think we have to keep a constant review to make sure we never return to that situation."
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