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BRITAIN’S banks must “show restraint” and not abandon the cap on senior bankers’ bonuses, the TUC has urged.
The intervention follows an announcement last week by Goldman Sachs that it would be lifting the cap paid out to its bosses, following a Conservative decision to let banks hand out unlimited bonuses.
Under the previous legal cap, an employee’s bonus could be no more than 100 per cent of their annual pay, or 200 per cent with shareholders’ approval.
But this cap was scrapped by former chancellor Kwasi Kwarteng as part of former PM Liz Truss’s mini-budget.
The TUC said banks could still voluntarily decide not to pay bonuses at a higher rate than the previous cap.
A recent analysis by the union body showed that even with the previous cap in place, British banks paid out bumper bonuses in 2022 and 2023.
In 2022 alone the annual bonus pool for workers in the finance and insurance sector was £18.7 billion.
TUC general secretary Paul Nowak said: “At a time when millions are struggling to make ends meet, it would just be plain wrong for banks to hand out even larger bonuses to those at the very top.
“I urge bank leaders today to do the right thing and show some restraint. Don’t follow the example of Goldman Sachs.
“The bankers’ bonus cap was put in place to stop the excessive risk-taking and greed we saw in the run-up to the financial crisis. The Tories should never have abolished it.
“We cannot afford a return to the bonus culture which crashed our economy.
“If UK banks press ahead with abandoning the cap for senior staff it will be further proof of the huge disconnect between Britain’s boardrooms and hard-pressed families.”
The Bank of England will be announcing its latest interest rates decision on Thursday, with figures covering the economy’s performance over the first three months of this year being released on Friday.
Economists are widely expecting the Bank’s Monetary Policy Committee to keep rates at 5.25 per cent, despite political pressure from the government to lower them ahead of the election.
Shadow chancellor Rachel Reeves has accused the government of “gaslighting” the public about the economy, saying ministers’ over-optimistic statements are “out of touch” with Britons still struggling with the cost of living.
