Deputy Labour leader Angela Rayner has demanded Boris Johnson’s office release all details of meetings he has held to discuss the bankers’ bonus cap over the past year.
Rayner wrote to Johnson’s chief of staff Steve Barclay to request details of a meeting Johnson held with City figures last year where, according to the Financial Times, the PM was lobbied to drop the retained EU law.
Number 10 and the Cabinet Office are adamant the government will not scrap the cap, after media reports this week suggesting that Barclay is pushing to change the rules around the pay of City executives.
Number 10 said the only changes being discussed are around scrapping restrictions on the types of share holdings that can be owned by non-executive directors.
Rayner asked Barclay to:
- Release minutes of a June 2021 meeting where the PM was reportedly lobbied to drop the bonus cap
- Reveal if there were any agreements at these meetings
- Give details of any further meetings held with bankers on this topic
- Reveal if the issue has been brought up by Tory party donors
“It appears this government’s ‘new approach’ is to prioritise increasing banker’s bonuses rather than helping working people,” Rayner said.
“The hypocrisy of removing restrictions for bankers while the public sector face a prolonged period of below-inflation pay rises is clear.”
The cap, which was introduced by Brussels after the 2008 financial crash, sees bankers’ bonuses limited to no more than 100 per cent of their fixed pay or double that with explicit shareholder approval.
Removing it has been touted as a potential benefit of leaving the EU by some Brexiteers and Johnson said while he was London mayor in 2012 that it was a “moronic piece of economic policy”.
A senior Treasury source told City A.M. that the government will not drop pay restrictions on City workers and that “Labour is just trying to make a toxic issue out of nothing”.
“It would be politically stupid and completely unnecessary. Bankers aren’t even asking for it – very few of them anyway – and it’s not a competitive issue for firms,” they said.
“Labour don’t know what they’re talking about.”
Johnson’s spokesperson said the only change being considered by the government was to allow executives to buy more shares in firms where they hold a non-executive director position.
“Individuals are already encouraged to invest in the companies with which they are non-executive directors, but there are some restrictions on share ownership that are being explored,” they said.
“The view is that looking at this and potentially making this change could ensure these individuals are more invested in the success of the companies they are involved in which helps generate jobs, growth and investment.”
A Cabinet Ofice spokesperson said: “Claims that the government is planning to ease restrictions on bankers’ pay are untrue. Ministerial meetings with external organisations are declared in line with the Government’s transparency agenda.
“We are exploring whether there are any unnecessary restrictions on paying non-executive directors in shares instead, as we set out at the end of last month. This could ensure they are fully invested in the success of the company they run, helping to protect and generate jobs, growth and investment.”