Propping up the rich

Propping up the rich

by Peter Black

Let's play a political game: You are Prime Minister of the United Kingdom, facing one of the worse cost-of-living crises for decades, people are suffering from an abnormally high tax burden due to your policies, so much so that even state pensioners with no other form of income could find themselves in the higher tax bracket in a few years' time, and because of your ideological insistence on not giving concessions to the EU, the economy is struggling to grow. But, you have some room for manoeuvre. How is the best way to use it to help the maximum number of people?

This is no game, it is the situation faced by Rishi Sunak today, and according to the Independent, he has decided to use his position to... push ahead with Liz Truss’s plan to axe the cap on bankers’ bonuses despite warnings that boosting bumper payouts for the rich is “obscene”.

As the paper explains, scrapping the limit on multimillion-pound bonuses for high earners is one of the only policies to survive the disastrous “Trussonomics” period last autumn:

Mr Sunak has approved his predecessor’s policy to get rid of the post-Brexit rules around capping bonuses – inherited from the EU when the UK was still a member.

The approval comes around a year after former chancellor Kwasi Kwarteng first revealed plans to change the bonus rules as part of the mini-Budget fiasco, which sparked market panic.

Even Boris Johnson had reportedly backed away from taking the step because he feared a huge political backlash during the cost of living crisis.

On Tuesday, the Financial Conduct Authority (FCA) and Bank of England’s Prudential Regulatory Authority (PRA) confirmed that the current bonus cap will be lifted on 31 October.

The move – part of a bid to help London’s financial centre fend off competitors after Brexit – was immediately condemned by unions as “an insult to working people”.

The Independent explains that the cap – introduced despite UK opposition by the EU in 2014 in the wake of the banking crisis – requires bonuses to be limited to no more than 100 per cent of fixed pay, or double that with shareholder approval. It seems that in this post-Brexit world, Tory--run UK is now being run for the benefit of the bankers.