A large majority support caps on bankers’ bonuses – and few think a banker exodus would be bad for Britain
This week the UK government withdrew a legal challenge to European Union legislation capping bankers’ bonuses at 100% of their pay, or 200% with shareholder approval. The measures are designed to reduce incentives for bankers to take excessive risks for large rewards; part of the culture diagnosed as leading to the financial crisis of 2008-9. The Treasury had opposed the cap on the grounds that talent would be driven out of Europe, and had argued that basic pay – which is harder to slash in times of crisis – would be inflated as a result.
New YouGov research finds that British people are on the side of the EU on this issue; and despite being divided over whether a banker exodus would result, are doubtful that this would be a bad thing even if it did.
A large majority (73%), consistent across all demographics, including Conservatives (68%), support capping the size of bonuses that banks can pay to their employees at 100% of their salaries.
Conservatives are slightly persuaded by the government’s argument that a bonus cap would lead to a loss of talent (47% say lots or some bankers would, compared to 37% of Labour voters). On the whole, few (9%) think a great deal of bankers would leave Britain, while 31% say some would and 44% say few would.
With regards to whether a banking exodus would be a bad thing, only 23% think so. The largest group (48%) think that bankers leaving Britain would make no difference. 14% even say think would be a good thing.
The Chancellor, George Osborne, said “I’m not going to spend taxpayers’ money on a legal challenge now unlikely to succeed. The fact remains these are badly designed rules that are pushing up bankers’ pay not reduce it". The Governor of the Bank of England, Mark Carney, appeared to be in agreement with the Chancellor, arguing that “Standards may need to be developed to put non-bonus or fixed pay at risk”.