LABOUR would not reinstate the cap on bonuses for bankers should the party win the next General Election.
The regulations, which limit annual payouts to twice a banker’s salary, were introduced by the EU in 2014 in a bid to avoid excessive risk-taking after the 2008 financial crisis.
Former prime minister Liz Truss and her chancellor Kwasi Kwarteng made the decision to scrap the cap on bankers’ bonuses in 2022, which Kwarteng claimed would encourage global banks to create jobs, invest and pay taxes in the City.
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After coming into effect last year, the policy has caused backlash for rewarding bankers and failing to address the cost of living crisis.
What Labour have said
In an interview with the BBC, Reeves (below), a former Bank of England economist, said she has no intention to reinstate the regulations.
She told the broadcaster: “The cap on bankers’ bonuses was brought in in the aftermath of the global financial crisis and that was the right thing to do to rebuild the public finances.
“But that has gone now and we don’t have any intention of bringing that back. And as a chancellor of the exchequer, I would want to be a champion of a successful and thriving financial services industry in the UK.”
SNP response
The Labour decision comes despite Reeves previously condemning the Tories for scrapping the cap just three months ago.
In a post on Twitter/X, SNP Westminster leader Stephen Flynn shared a tweet from Reeves sent on October 31 which said: “Today – in the midst of their cost of living crisis – the Conservatives are scrapping the cap on bankers’ bonuses.
A cost of living crisis.
— Stephen Flynn MP (@StephenFlynnSNP) January 31, 2024
And the Labour Party have today announced that they support the decision of the Tories to remove the cap on bankers’ bonuses.
Shows you where their priorities lie, doesn’t it?
Have a listen ⬇️ pic.twitter.com/SlDfAwiYfC
“It tells you everything you need to know about this Government.”
In a separate post, Flynn added: “A cost of living crisis. And the Labour Party have today announced that they support the decision of the Tories to remove the cap on bankers’ bonuses.
“Shows you where their priorities lie doesn’t it?”
The SNP's social justice spokesperson David Linden (below) echoed Flynn's thoughts saying Labour are "offering no change from broken Brexit Britain".
"By admitting he would slash funding for public services, while helping the super rich, Starmer has shown he has the wrong priorities and is on the side of the wealthy Westminster elite, not ordinary working families," the MP for Glasgow East said.
"Unlike Starmer, who is too weak to take on vested interests, the SNP will always prioritise support for working families and investment in our NHS. Those are SNP values - and they are Scotland's values."
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