Rachel Reeves, the shadow chancellor, has confirmed in a BBC interview that a Labour Government would not reinstate the cap on bankers’ bonuses, a regulation abolished by the Conservatives last year.
The cap, initially set at the EU level in 2014, limited bonuses to 100% of fixed pay, or 200% with shareholder approval, aiming to mitigate risk-taking behaviour in the financial sector.
The cap’s removal by the UK Prudential Regulation Authority (PRA) and the UK Financial Conduct Authority (FCA) on 24 October 2023 was met with criticism, particularly from trade unions.
However, Reeves, a former Bank of England official, said” “The cap on bankers’ bonuses was bought 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 chancellor of the exchequer, I would want to be a champion of a successful and thriving financial services industry in the UK.”
