The Guardian view on bankers’ bonuses: don’t scrap the cap
In the Conservative manifesto of 2019, there is not a single suggestion that the party would abolish the cap on bankers’ bonuses that was introduced after the 2008 financial crisis. The absence of such a commitment is hardly surprising. Even to have hinted at such a move would have been electorally damaging to the Tory party, especially in the wake of the austerity years in which most people’s real wages had continued to fall steadily below pre-crisis levels.
Even more important, it would have blown a hole in the central promise of Boris Johnson’s campaign. Levelling up the country in the wake of Brexit was the cornerstone of his manifesto. Although vague in far too many ways, levelling up represented a turn away from the myth that the prosperity of the rich would somehow water everyone else’s gardens. The electoral appeal of the policy turn was huge. Thousands of low-income voters embraced the Tory party, helping Mr Johnson to an 80-seat victory.
The suggestion that the chancellor, Kwasi Kwarteng, is now considering scrapping the bankers’ bonus cap is another signal that Liz Truss supports a very different, more deregulated and much more market-driven economic policy to that of Mr Johnson. The absolutely explicit intention is to remove the constraints, such as they were, that were imposed on the banks, the financial sector and the City after the 2008 crash. The government has no mandate for such a move.
As a gesture of contempt and indifference towards ordinary households at a financially horrendous time, Mr Kwarteng’s idea is hard to beat. The cost of living has become an increasingly grim battle for millions, inflicting spending choices that no one should have to make. With colder weather beginning and the choices likely
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