UK Axes EU-inherited Cap On Banker Bonuses

London, Sept 23 (UrduPoint / Pakistan Point News - 23rd Sep, 2022 ) :Britain on Friday axed a cap on bankers' bonuses aimed at boosting London's finance sector after Brexit, raising anger amid a cost-of-living crisis.

Finance minister Kwasi Kwarteng removed an EU-inherited policy that limits bankers' bonuses at twice the basic salary.

But the move, along with the scrapping of the top income tax bracket, triggered stinging criticism from opposition parties and unions.

New British Prime Minister Liz Truss, whose finance chief also outlined a costly freeze on energy bills to help households and business, said removing the bonus cap would stimulate economic growth and jobs.

Kwarteng followed up by stating that Britain needed "global banks to... invest jobs here and pay taxes here in London -- not in Paris, not in Frankfurt and not in New York".

"All the bonus cap did was to push up the basic salaries of bankers or drive activity outside Europe," the chancellor of the exchequer told parliament in a mini budget on Friday.

"It never capped total remuneration... so as a consequence of this we are going to get rid of it." A strong UK economy "has always depended on a strong financial services sector", Kwarteng insisted.

Britain's cap had been in place since 2014, a legacy of membership of the European Union that Britain exited last year.

Brussels introduced the cap across the bloc following the global financial crisis, when banks received enormous state bailouts.

In another boost to high-earners on Friday, Kwarteng removed the 45-percent top rate of income tax levied on earnings above �150,000 ($169,000).

A new top rate of 40 percent would be applied to all annual salaries above �50,000.