LONDON (Reuters) – British Finance Minister Kwasi Quarting is considering removing restrictions on bankers’ bonuses to boost post-Brexit competitiveness in London against financial capitals such as New York and Hong Kong, a source familiar with Quarting’s thinking said.
Prime Minister Liz Truss has promised to truly “unshackle” the City of London after Brexit, and Kwarteng is studying the possibility of dropping the maximum bonus for bankers, which was originally adopted as an EU rule.
The source, who spoke on condition of anonymity, confirmed what was reported in the Financial Times that the change was under consideration but said no decisions had been taken.
An EU-wide cap on bankers’ bonuses was imposed in the wake of the financial meltdown and remains in place in Britain despite the country leaving the bloc.
The administration of former Prime Minister Boris Johnson considered the idea of raising the hats in June, but it was ultimately ruled out.
To reduce criticism about helping wealthy bankers amid a cost-of-living crisis, Kwarteng will mark the move in the context of Britain’s recently announced move to reduce consumer energy bills for two years, the Financial Times reported.
Truss said she wants to reduce fiscal rules inherited from the European Union which she says “disrupt the city and its contribution to the whole country”.
Kwarteng aims to release a financial statement before the end of this month – possibly next week – and is likely to use it to say how he will deliver the tax cuts that Truss promised during her campaign for Tory leadership.