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| Cap on bankers bonuses will still be lifted | |
| (about 5 hours later) | |
| A plan to remove a cap on bankers' bonuses is one of the few mini-budget policies to remain after most measures were unwound by the new chancellor. | A plan to remove a cap on bankers' bonuses is one of the few mini-budget policies to remain after most measures were unwound by the new chancellor. |
| Jeremy Hunt made no mention of a U-turn on removing the cap on banker's bonuses as he reversed many of his predecessor's other policies on Monday. | Jeremy Hunt made no mention of a U-turn on removing the cap on banker's bonuses as he reversed many of his predecessor's other policies on Monday. |
| Kwasi Kwarteng said last month the cap would be lifted, as part of a shake-up of rules governing the City of London. | Kwasi Kwarteng said last month the cap would be lifted, as part of a shake-up of rules governing the City of London. |
| A Treasury source told the BBC the plan to remove the cap was going ahead. | A Treasury source told the BBC the plan to remove the cap was going ahead. |
| It is understood the Prudential Regulation Authority (PRA) will hold a consultation on the plans later this year. | It is understood the Prudential Regulation Authority (PRA) will hold a consultation on the plans later this year. |
| Critics argued the move benefited wealthy people at a time when many households were struggling with living costs. | Critics argued the move benefited wealthy people at a time when many households were struggling with living costs. |
| But Mr Hunt did not mention any reversal of the policy, which was designed to boost growth through a post-Brexit shake-up of the rules covering the financial sector. | But Mr Hunt did not mention any reversal of the policy, which was designed to boost growth through a post-Brexit shake-up of the rules covering the financial sector. |
| Labour MP Siobhain McDonagh asked the chancellor following his emergency statement in the House of Commons why he decided to carry on "boosting bankers' bonuses in the heart of a cost-of-living crisis". | Labour MP Siobhain McDonagh asked the chancellor following his emergency statement in the House of Commons why he decided to carry on "boosting bankers' bonuses in the heart of a cost-of-living crisis". |
| Mr Hunt said the previous policy didn't work and argued the government would get more tax from rich bankers by removing the cap. | Mr Hunt said the previous policy didn't work and argued the government would get more tax from rich bankers by removing the cap. |
| What Jeremy Hunt's statement means for you | What Jeremy Hunt's statement means for you |
| Two thirds of tax cuts from mini-budget reversed | Two thirds of tax cuts from mini-budget reversed |
| City bosses have long complained about the EU-wide bonus rules which cap bonuses at twice an employee's salary, arguing they lead to higher base pay that pushes up banks' fixed costs. | City bosses have long complained about the EU-wide bonus rules which cap bonuses at twice an employee's salary, arguing they lead to higher base pay that pushes up banks' fixed costs. |
| Unlike bonuses, those costs cannot be adjusted in line with the firm's financial performance, they add, making the UK a less attractive place to locate their business than the US or Asia. | Unlike bonuses, those costs cannot be adjusted in line with the firm's financial performance, they add, making the UK a less attractive place to locate their business than the US or Asia. |
| However, critics have argued that uncapped bonuses lead to the kind of excessive risk-taking that led to the financial crisis of 2008. | However, critics have argued that uncapped bonuses lead to the kind of excessive risk-taking that led to the financial crisis of 2008. |
| On Friday, the Trades Union Congress (TUC) said City bonuses had increased at more than twice the speed of wages since the 2008 financial crash. | On Friday, the Trades Union Congress (TUC) said City bonuses had increased at more than twice the speed of wages since the 2008 financial crash. |
| The union body said its analysis found bonuses in the finance and insurance sector were now worth, on average, around £20,000 a year - their highest level on record. | The union body said its analysis found bonuses in the finance and insurance sector were now worth, on average, around £20,000 a year - their highest level on record. |
| "Everyone who works for a living deserves to earn a decent living, but ministers are holding down the pay of millions of key workers, while lining the pockets of City financiers," said Frances O'Grady, the TUC's general secretary. | "Everyone who works for a living deserves to earn a decent living, but ministers are holding down the pay of millions of key workers, while lining the pockets of City financiers," said Frances O'Grady, the TUC's general secretary. |
| The TUC called on the government to boost the minimum wage to £15 an hour. The minimum wage, which is known officially as the National Living Wage is currently £9.50 an hour for over-23s. | The TUC called on the government to boost the minimum wage to £15 an hour. The minimum wage, which is known officially as the National Living Wage is currently £9.50 an hour for over-23s. |
| Andrew Sentance, a former member of the Bank of England's rate-setting Monetary Policy Committee, has previously told the BBC that the move sends a "rather confused signal when people are being squeezed in terms of the cost of living, and the government is trying to encourage pay restraint in the public sector". | Andrew Sentance, a former member of the Bank of England's rate-setting Monetary Policy Committee, has previously told the BBC that the move sends a "rather confused signal when people are being squeezed in terms of the cost of living, and the government is trying to encourage pay restraint in the public sector". |
| The Labour Party has previously said the government's decision to lift the cap was "bizarre" and will "do nothing to support growth". | The Labour Party has previously said the government's decision to lift the cap was "bizarre" and will "do nothing to support growth". |
| Labour Shadow Chancellor Rachel Reeves said in the House of Commons on Monday that "ordinary working people" were paying the price for the recent market turmoil describing it as a "Tory crisis made in Downing Street". | Labour Shadow Chancellor Rachel Reeves said in the House of Commons on Monday that "ordinary working people" were paying the price for the recent market turmoil describing it as a "Tory crisis made in Downing Street". |
| "All that is left after these humiliating u-turns are higher mortgages for working people, and higher bonuses for bankers," she said. | "All that is left after these humiliating u-turns are higher mortgages for working people, and higher bonuses for bankers," she said. |