Business Today: Kwasi Kwarteng to lift cap on banker bonuses

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Kwasi Kwarteng to lift cap on banker bonuses
Live / Kwasi Kwarteng to lift cap on banker bonuses
Chancellor Kwasi Kwarteng is reportedly planning to lift the EU-imposed banker bonus cap as part of post-Brexit reforms; Shell names Wael Sawan as its new chief executive
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Today's agenda
Banker pay is back in the spotlight this morning after reports emerged that Chancellor Kwasi Kwarteng is considering lifting a bonus cap as part of the government's wide-ranging post-Brexit reforms.

The cap was part of the EU's reaction to the 2008 financial crisis, and means that year-end bonuses are currently limited to two times their annual salary.

But those EU rules are now likely to be repealed eight years after their introduction. The Financial Times, which first reported the news, said the controversial move was part of the government's plans to boost the City's global competitiveness and make the UK a more attractive place for banks to do business.

Remember that the government is also planning to controversially reintroduce "competitiveness" as a secondary objective for UK regulators through the Financial Services and Markets Bill, which is about to head to committee. Though economists and ex-politicians have warned it is an inappropriate throw-back to pre-crisis conditions. Critics are likely to make the same argument about lifting the bonus cap.

It all seems to be part of the government's wider strategy to put growth at the centre of all decision making, and generally lure more business, stock market listings and start-ups to London.

But lifting the cap could prove widely controversial at a time when households are struggling to make ends meet amid the cost of living crisis, even with the government's £150bn support package for energy bills on the horizon.


The agenda
• 
1.30pm BST: US retail sales for August 
• 2:15pm BST: US industrial production for August

We'll be tracking all the main events throughout the day ...
Nils Pratley on finance
The EU's energy windfall tax gives UK ministers a yardstick for their talks
The EU's energy windfall tax gives UK ministers a yardstick for their talks
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