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The Chancellor wants to end the banker bonus cap to strengthen the City of London

The new chancellor wants to lift the cap on bankers’ bonuses, which could widen the gap between rich and poor in the looming recession.

The cap was introduced after the 2008 financial meltdown – as part of a risk reduction effort – but Kwasi Kwarteng believes the regulations are making it difficult to attract the best workers to the City of London.

The Treasury says no decisions were made and Boris Johnson backed off from taking this step because he feared a political response to the cost of living in a crisis.

Keir Starmer accused the then prime minister of a “shift”, describing the idea of ​​lifting the cap as “a wage increase for bankers, a wage cut for district nurses.”

The restriction, introduced in the wake of UK opposition by the EU in 2014, requires bonuses to be capped at no more than 100%. fixed remuneration or twice as much with the consent of the shareholder.

Unless bonuses are capped, millions of workers, especially in the public sector, will face real wage cuts as wages do not keep up with inflation set at 10%.

Mr. Kwarteng is keen to increase London’s competitiveness against New York, Frankfurt, Hong Kong and Paris, according to people informed about the discussions who spoke to Financial times.

One CFO said scrapping the cap would be “a pure Brexit dividend”. Something you can represent as winning. “

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