Thursday, September 15, 2022
Tories ensure cost of living crisis does not hit rich bankers
There is nothing like looking after your own, and when it comes to the Tories they have had decades of experience of doing just that. It should come as no surpries therefore, to see that, while the rest of us are struggling with runaway inflation and unfeasibly high energy costs, one of the first acts of the new Prime Minister and her Chancellor of the Exchequer is to scrap the cap on bankers' bonuses that was imposed in the middle of the 2008 financial crash.
The Guardian reports that Kwasi Kwarteng wants to abolish rules imposed after the 2008 financial crash that capped bonuses at twice an employee’s salary. It is part of what he calls “Big Bang 2.0” – a post-Brexit deregulation drive to make the City more competitive:
Andrew Sentance, a member of the Bank of England’s monetary policy committee during and after the financial crisis, said it was a “very bad” time to consider increasing banker’s bonuses.
Speaking on BBC Radio 4’s Today programme on Thursday, Sentance said: “It sends a rather confused signal when people are being squeezed in terms of the cost of living and the government is trying to encourage pay restraint in the public sector.”
He added: “To appear to allow bankers to have bigger bonuses at the same time, doesn’t look very well timed. There may be some longer-term arguments for pursuing this policy, but I think the timing would be very bad if they did it now.”
Prof Susan Michie, the director of the Centre for Behaviour Change and a scientific adviser to the government, tweeted: “0.3% of the British electorate voted for Truss as PM. Worth remembering when evaluating her Cabinet’s policies eg the trailed scrapping of anti-obesity measures and lifting the cap on bankers’ bonuses (which is already 2x their salaries) whilst asking others for wage restraint.”
Lionel Barber, the former editor of the Financial Times, tweeted that the move would be “politically toxic”.
is giving more money to the rich and to hell with everybody else going to be the abiding theme of the new Truss administration? At least they have now confirmed that this was the whole rationale behind Brexit.
The Guardian reports that Kwasi Kwarteng wants to abolish rules imposed after the 2008 financial crash that capped bonuses at twice an employee’s salary. It is part of what he calls “Big Bang 2.0” – a post-Brexit deregulation drive to make the City more competitive:
Andrew Sentance, a member of the Bank of England’s monetary policy committee during and after the financial crisis, said it was a “very bad” time to consider increasing banker’s bonuses.
Speaking on BBC Radio 4’s Today programme on Thursday, Sentance said: “It sends a rather confused signal when people are being squeezed in terms of the cost of living and the government is trying to encourage pay restraint in the public sector.”
He added: “To appear to allow bankers to have bigger bonuses at the same time, doesn’t look very well timed. There may be some longer-term arguments for pursuing this policy, but I think the timing would be very bad if they did it now.”
Prof Susan Michie, the director of the Centre for Behaviour Change and a scientific adviser to the government, tweeted: “0.3% of the British electorate voted for Truss as PM. Worth remembering when evaluating her Cabinet’s policies eg the trailed scrapping of anti-obesity measures and lifting the cap on bankers’ bonuses (which is already 2x their salaries) whilst asking others for wage restraint.”
Lionel Barber, the former editor of the Financial Times, tweeted that the move would be “politically toxic”.
is giving more money to the rich and to hell with everybody else going to be the abiding theme of the new Truss administration? At least they have now confirmed that this was the whole rationale behind Brexit.
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The EU ban was always little more than a symbolic gesture as banks found ways round it. That is presumably why the coalition rejected the idea before the EU adopted it. Increasing the top rates of tax and tightening up on avoidance are better ways of curbing excessive executive pay, But of course we are unlikely to see either under this administration.
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