Whilst obviously its not great Political optics during a grim cost of living crisis there are sound arguments for such a move.
Since the cap was introduced by the EU nine years ago, the unintended consequence of the has been to increase bankers’ salaries as a workaround. The Financial Conduct Authority itself has welcomed the move on the grounds that fixed yearly payments, rather than variable bonuses, pushes up a firm’s fixed costs and limits their ability for manoeuvre. City bosses contend that the cap stops them from adjusting to poor financial performance and that it makes the UK a less attractive place in which to do business. It’s worth remembering too that Britain’s tax base is unusually reliant on a small number of very well-paid people: the top 0.1 per cent of earners contribute 12 per cent of all income tax.
Difficult Politics but sensible Economics.
Only if they find a way to connect bonuses with the amount tax paid.
I think its the only part of Kwartong’s mini-budget that was kept. The $36bn added to the nation’s debt will be its other legacy.
Can’t tell why the TUCs opinion is relevant here. They don’t seem to represent the industry.
I’ve never understood the negative reaction to massive banker bonuses. Pay them as much as you want so long as we’re collecting a good chunk of tax on them.
If only there were better options of money out there that take your money out of the hands of both banks AND government…
It also just leads to them doing risky shit that ends up costing the taxpayer billions to clean up.
7 comments
Whilst obviously its not great Political optics during a grim cost of living crisis there are sound arguments for such a move.
Since the cap was introduced by the EU nine years ago, the unintended consequence of the has been to increase bankers’ salaries as a workaround. The Financial Conduct Authority itself has welcomed the move on the grounds that fixed yearly payments, rather than variable bonuses, pushes up a firm’s fixed costs and limits their ability for manoeuvre. City bosses contend that the cap stops them from adjusting to poor financial performance and that it makes the UK a less attractive place in which to do business. It’s worth remembering too that Britain’s tax base is unusually reliant on a small number of very well-paid people: the top 0.1 per cent of earners contribute 12 per cent of all income tax.
Difficult Politics but sensible Economics.
Only if they find a way to connect bonuses with the amount tax paid.
I think its the only part of Kwartong’s mini-budget that was kept. The $36bn added to the nation’s debt will be its other legacy.
Can’t tell why the TUCs opinion is relevant here. They don’t seem to represent the industry.
I’ve never understood the negative reaction to massive banker bonuses. Pay them as much as you want so long as we’re collecting a good chunk of tax on them.
If only there were better options of money out there that take your money out of the hands of both banks AND government…
It also just leads to them doing risky shit that ends up costing the taxpayer billions to clean up.