Brexit-backing Tory peer Lord Spencer has argued in favour scrapping of bankers’ bonuses during a back and forth with radio presenter Nick Ferrari over Brexit. Lord Spencer suggested that scrapping EU legislation, such as the 2015 bonuses cap, might be necessary for the city of London to maintain its leading position in the global market for financial services.
Asked to outline some benefits of Brexit Britain could explore, Lord Spencer told LBC: “Financial services, there are loads of European legislation that have been lumbered on financial services which should be peeled off.
“One of them, which of course will not poll well, we could take away the cap on bankers’ bonuses. I mean that was all a European project, obviously polls well.
“Financial services is one of our most successful and indeed I think our single most successful export business.
“If we want to retain the City of London as a leading financial services centre we should get rid of all that baggage on our back.
“We have moved away from the financial crisis, it was more than ten years ago.”
Banks will traditionally give out performance bonuses to some of their staff at the end of the financial year.
In 2014, the European Union introduced a cap that limited bonuses to 100 percent of salary unless at least 65 percent of a firm’s shareholders voted in favour to award more.
Forecasts issued by the Office for Budget Responsibility (OBR) back in March suggest bonuses are due to rise by as much as 20 percent in 2021-22,
An average bonus of £596,000 was handed out to top-performing investment bankers at HSBC in January amid some of the largest payouts since the 2008 financial crash, according to This Is Money.
On Thursday, Downing Steet confirmed the Government is not planning to put restrictions on dividends or bonuses for companies that receive state support under Prime Minister Liz Truss’s newly unveiled energy plans.
The Prime Minister’s official spokesman said: “We are not introducing any further regulations or measures in that area on these companies.”
Asked if she is comfortable with firms getting Government support paying out bonuses, he said: “The Prime Minister’s view is she wants the UK to be a pro-growth, pro-business country where we create the conditions that these sorts of companies are able to invest in the long-term security of the UK.”
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The Prime Minister’s two-year plan paid for by tens of billions of pounds of borrowing will save the typical household around £1,000 from October and protect billpayers from further expected rises over the coming months.
For businesses and other non-domestic users such as schools and hospitals, which have not been covered by the existing price cap, a six-month scheme will offer equivalent support.
After that there will be ongoing support for the most vulnerable industries, with a review in three months’ time to decide where the help should be targeted.
The plan will see the Government limit the price suppliers can charge customers for units of gas, replacing the existing price cap set by regulator Ofgem.