Closing summary
So that’s it for another day … thanks for following along on my first business live blog outing. Here are the main stories we covered today:
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Workers' union slams scrapping of bankers' bonuses cap as an 'obscene decision'
The head of the Trades Union Congress (TUC) has said the move by City regulators to remove the current cap from the end of the month is an “obscene decision”, an “insult” to millions of people struggle with the cost of living crisis.
Paul Nowak, the general secretary of the TUC, added that it was time for a “national conversation about taxing wealth properly … [so] those at the top pay their fair share”.
This is an obscene decision. City financiers are already enjoying bumper bonuses. They don’t need another helping hand from the Conservatives. At a time when millions up and down the country are struggling to make ends meet – this is an insult to working people. [Prime minister] Rishi Sunak has shown once again that he is more interested in feather-nesting the super-wealthy than helping struggling families. Rampant inequality will do nothing to boost growth or competitiveness – it will just hold our economy back
In Tuesday, the Financial Conduct Authority (FCA) and Bank of England’s Prudential Regulatory Authority (PRA) confirmed the ending of the cap, which limits bonuses to twice base pay for employees of banks, building societies and investment firms.
The FCA said that the move will give businesses the “freedom to restructure their pay over time” to “better align remuneration with prudent risk-taking”.
The cap emerged as part of changes introduced after the 2007-08 banking crash, and aimed to stamp out a bonus culture blamed for encouraging short-term profits over longer-term stability.
The UK, which has long planned to scrap the cap, was forced to implement the legislation by the EU in 2014.
Former chancellor George Osborne even attempted to overturn it at the European court of justice.
Last October, chancellor Jeremy Hunt said he would press on with plans to scrap the legislation, after he replaced Kwasi Kwarteng, who had announced the intention to get rid of it in the run-up to his disastrous mini-budget.
Hunt defended his decision, saying that the policy had merely increased fixed salaries to make up for lower bonuses.
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