Shadow Chancellor Rachel Reeves’s decision that a Labour government will not reinstate a cap on bankers’ bonuses has stirred up a storm of opposition among left-wing organisations – and voters.

The cap limits yearly bonus payouts for bankers to twice their salary; it was introduced by the EU in 2014 when it was intended to prevent excessive risk-taking after the global financial crash of 2008.

Kwasi Kwarteng scrapped it in his 2022 mini-budget – sparking widespread outrage for rewarding bankers during a cost-of-living crisis and growing levels of poverty in Britain.

But Rishi Sunak maintained the policy, bringing it into force in October 2023.

Talking to the BBC on January 31, Reeves said: “The cap on bankers’ bonuses was brought in in the aftermath of the global financial crisis and that was the right thing to do to rebuild the public finances.

“But that has gone now, and we don’t have any intention of bringing that back. And as chancellor of the exchequer, I would want to be a champion of a successful and thriving financial services industry in the UK.”

“Successful and thriving”? Or “Excessively risk-taking”? The latter seems more likely to This Writer and it seems Reeves and Labour leader Keir Starmer are deliberately planning to repeat New Labour’s worst mistakes.

That certainly seems to be the feeling among left-wing organisations and individuals, according to Left Foot Forward:

Labour’s grassroots left-wing organisation, Momentum, described it as a “terrible decision,” which is “totally out of touch with Labour’s values and public opinion.”

“For over 40 years our economic model has sucked wealth from the country and enriched a few in the City.

“It even crashed the economy in 2008. Yet instead of learning the lessons from New Labour’s failures, Starmer and Reeves seem determined to repeat them.”

The Peace & Justice Project, founded by the former Labour leader Jeremy Corbyn, said:

“Labour’s latest U-turn, the refusal to reinstate the cap on bankers’ bonuses, shows it is unwilling to challenge the establishment status quo…”

In a post on X, Corbyn asked: “Where is the justification for letting the rich get richer while children starve and people sleep rough on the streets?

“We cannot afford these obscene levels of inequality. It’s our job to offer a real alternative – one that puts human need before corporate greed.”

On the social media, I found this:

And “MrsGee” posted on ‘X’: “What about ‘uncertainty’ in peoples lives, in a profiteer-driven cost of living crisis @LabourSJ? What about millions of children in poverty, families unable to afford to eat & heat their homes? You want them to continue to suffer when you could help with a wealth tax? Poor show.”

Labour’s inconsistency in boosting bankers while pushing families into poverty by keeping the two-child cap on child benefit was also widely pilloried:

Apparently a Labour spokesperson said, “We are not in the business of telling business what to do about pay and conditions.”

But this is nonsense. Telling businesses what to do about pay and conditions is precisely what governments – or in this case, possible governments-in-waiting – should be doing.

Source: Labour to back bankers’ bonuses: How the Left responded – Left Foot Forward: Leading the UK’s progressive debate

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