Kwasi Kwarteng has controversially scrapped the cap on bankers' bonuses allowing City bosses to hand out millions of pounds to their employees.
The Chancellor of the Exchequer overturned the rules that were brought in following the global financial crisis in 2008 when Gordon Brown was Prime Minister.
Currently bonuses handed out to bankers are limited at double an employee's salary. It was announced last week that the government was considering removing the cap which was slammed by opposition parties. Labour 's shadow chief secretary to the Treasury, Pat McFadden, branded it a "bizarre move".
He said: "This is a bizarre move that will do nothing to support growth, and comes straight from the tired Tory playbook on trickle-down economics which haven't worked for them over the last decade."
The move is likely to cause an outcry as millions of families struggle to make ends meet as the cost of living soars.
Chancellor Kwasi Kwarteng was heckled by opposition MPs and cheered by his own side as he confirmed plans to get rid of the cap on bankers' bonuses.
He told the Commons: "A strong UK economy has always depended on a strong financial services sector. We need global banks to create jobs here, invest in London, and pay taxes in London, not Paris, not Frankfurt, not New York. All the bonus cap did was to push up the basic salaries of bankers, or drive activity outside Europe.
"It never capped total remuneration, so let's not sit here and pretend otherwise. So we're going to get rid of it.
"And to reaffirm the UK's status as the world's financial services centre, I will set out an ambitious package of regulatory reforms later in the autumn."
To sign up to the Daily Record Politics newsletter, click here.
