House of Commons · Westminster Hall
08 November 2022 · 3 other contributors · 3,898 words
Opened by Jon Trickett Lab Normanton and Hemsworth
Responding minister: Andrew Griffith
Summarised by AI from the official record, so it can contain mistakes.
Jon Trickett raised concerns about bankers’ bonuses in Westminster Hall. A government minister responded.
Key points
Key requests to Government
The MP asks the government to: 1) not lift the cap on bonuses, 2) appoint an independent commission to examine remuneration structures in the UK, starting with the financial sector, and 3) suspend bonus payments in the City during the current financial crisis until the commission reports.
MPs spoke in turn to share their views and ask questions. Here's what each person said.
Opened the debate
The MP is concerned about the removal of the cap on bankers' bonuses, which he believes contributed to the financial crisis in 2008. He cites statistics showing that bonuses have doubled since the crash, with some bankers earning over €10 million annually. The MP also notes a lack of empirical evidence supporting the idea that lifting the bonus cap would benefit the wider economy and highlights concerns about the influence of the financial sector on political decision-making.
In Airdrie and Shotts, 68% of people are cutting back on essentials like groceries, and 65% are worried about energy bills. The speaker criticises the government for favouring bankers over essential workers such as nurses and teachers.
The Government's response to a question on the impact of lifting the bankers' bonus in Cynon Valley was inadequate, suggesting that nobody in such areas will benefit from the policy. The speaker argues that lifting the ban benefits financiers and City individuals rather than essential key workers.
The MP supports the lead speaker's arguments about the need for social justice and criticizes the government's decision to lift the cap on bankers' bonuses while imposing a salary cap on public sector workers.
Government Response
Andrew GriffithIt is a pleasure to serve under the chairmanship of Mrs Cummins and I congratulate Jon Trickett on securing the debate. The Government are unapologetic about our commitment to the financial services industry, which contributes significantly to the UK's economy with 12% of gross value added and millions of jobs across the country, including 145,000 in Yorkshire and the Humber. Financial services produce billions in tax revenue, sustaining public services. The debate is not about a cap on bonuses but rather the composition of pay to be more performance-based. Since removing the restriction on bonus ratios, there has been an increase in performance-based pay with potential for salaries to decrease if performance does not meet expectations. Regulatory structures have evolved post-global financial crisis to include deferral and additional regulatory requirements. The Government celebrate the £34 million tax revenue from highly paid bankers and view this measure as a sensible part of taking on inherited European rules that do not fit the UK's unique situation.