Britain's banks were given the go-ahead last night to pay unlimited bonuses, drawing to a close a two-year political battle to rein in the City.
After months in which a series of government ministers of all parties have threatened a toughening in the stance over City bonuses, Downing Street said the government did not intend to intervene in the pay of the UK's top bankers.
Ministers are instead hoping for a face-saving deal in which the banks agree to lending targets and improve the way they disclose their pay deals, writes the Guardian.
One of the options being discussed is releasing information on the five highest paid individuals at each bank. Another, according to The Daily Telegraph, is to disclose how many are given more than £1m. MORE...
Meanwhile, Lord Jones, the chairman of HSBC's international advisory board, has said that bankers will take bumper bonuses this year because those that sacrificed big cash rewards last year received "not one jot of praise".
Speaking to The Daily Telegraph, the former Labour minister conceded that the "lack of sensitivity" among some parts of the banking community continued to amaze him.
But he added that the bosses who had foregone their bonuses had very little incentive to do the same again.
"To be fair, when the chief executives of the major banks sacrificed their contractual entitlements to bonuses over the past couple of years, or gave the cash to charity, not one jot of praise or even understanding came their way," he said. MORE...
Elsewhere, Labour leader Ed Miliband last night called on the Government to extend the tax on bankers' bonuses which raised £3.5bn last year.
Miliband said it was ''unfair'' that the banking levy being imposed by the Government this year would raise less than half that sum at a time when ordinary families are facing increases in taxes like VAT.
The Labour leader said extending the tax on bonuses for a second year would provide money to support growth in the economy.
His comments, at his first press conference of 2011, come as the banks prepare to pay out annual bonuses estimated to total as much as £7bn.
Mr Miliband said: "Last year, Labour's bonus tax raised £3.5bn from the banks. This year, the Government's bank levy will raise just £1.25bn.
"It is unfair and it is the wrong economic judgment to be cutting taxes for the banks at a time when everybody else is paying more." MORE...
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