Chancellor Kwasi Kwarteng has been accused of sending a ‘confused signal’ to struggling families with plans to scrap limits on bankers’ bonuses.

The cap, introduced by the European Union in the wake of the 2008 financial crash, curbs annual payouts to twice a banker’s salary – though banks frequently bypass it by paying higher salaries.

Mr Kwarteng reportedly wants to make the move as part of a wider post-Brexit overhaul of City regulations that would make London more attractive to global banks.

But the unconfirmed plan has attracted widespread criticism.

Former Bank of England monetary policy committee member Andrew Sentance told BBC Radio 4: ‘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 told BBC Radio 4’s Today programme.

‘So 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.’

TUC general secretary Frances O’Grady said: ‘Bonuses in the City are already at a record high.

‘While City executives rake it in, millions are struggling to keep their heads above water.

‘Working people are being walloped by soaring prices after the longest and harshest wage squeeze in modern history.

‘The Chancellor’s number one priority should be getting wages rising for everyone – not boosting bumper bonuses for those at the top.’

Lifting the cap would come at a time when the Government is refusing Labour’s demands for the multibillion pound strategy to help families and businesses through the energy crisis to be paid for by a windfall tax on the soaring profits of gas and oil giants.

While prime minister, Boris Johnson was forced to say he was not planning to lift the cap, as he faced a political backlash for reportedly considering the move in June.

Labour leader Sir Keir Starmer accused him of plotting ‘pay rises for City bankers, pay cuts for district nurses’.

Next Friday, Mr Kwarteng is expected to announce a mini-budget to help the country as it faces soaring bills but it is unclear if the bonus plan will be included.

Sources close to Mr Kwarteng said no final decisions had been made.

Get in touch with our news team by emailing us at [email protected].

For more stories like this, check our news page.

Source: Read Full Article