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Bankers’ Bonuses
08 November 2022
Lead MP
Jon Trickett
Normanton and Hemsworth
Lab
Responding Minister
Andrew Griffith
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Word Count: 3898
Other Contributors: 3
At a Glance
Jon Trickett raised concerns about bankers’ bonuses in Westminster Hall. A government minister responded.
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.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
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.
Anum Qaisar
SNP
Airdrie and Shotts
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.
Beth Winter
Lab
Cynon Valley
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.
Kerry McCarthy
Lab
Bristol East
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 Griffith
Government Response
It 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.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.