SCOTTISH Labour MP Michael Shanks has defended his party’s decision to not reinstate the cap on bonuses for bankers should the party win the next General Election.

The announcement was made by shadow chancellor Rachel Reeves at the end of January and was met with widespread criticism.

Following the announcement Scottish Labour were challenged to “disown” the plans, which were first introduced in the wake of the 2008 financial crisis to limit annual payouts to twice a banker’s salary.

However, speaking on the BBC’s Debate Night, Shanks said: “I think we opposed the Conservatives’ removing the cap on bankers’ bonuses.

“We supported it at the time because we’d come out of a financial crisis where people working in the financial services sector did not act responsibly but at the moment that’s not a priority for us.

“We’re not going to rush to reintroduce it but if we see that behaviour again, there’s nothing to stop us doing it.”

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The cap was previously removed during Liz Truss’s short-lived administration – a move which Reeves herself was critical of at the time.

Shanks added: “I think the crucial thing with the bankers' bonus was actually people just found other ways to remunerate themselves that didn’t involve a bonus and people still ended up still having increased pay packets despite the ban.

“It didn’t particularly work. It’s not a choice between one thing or the other. We need to see growth in the economy.

“Increased taxes from the Conservatives, from the chaos of the Liz Truss era or increased tax on people earning £29,000 from the SNP. Neither of these are going to lead to growth in the economy. We need a new path and it’s not going to be with either of our current governments.”

Shanks was named as the Labour MP for Rutherglen and Hamilton West in October. He became Scottish Labour's second MP, after Ian Murray.