Let’s get a fundamental proposition straight. In a free market, private business SHOULD allowed to reward those who work for it in whatever way it sees fit. The concept of a bonus payment is perfectly sensible and is no concern of Government. Unless, of course, you live in the EU.
European Union officials have struck a provisional deal on new financial rules, including capping bank bonuses. Under the agreement, bonuses will be capped at a year’s salary, but can rise to two year’s pay if there is explicit approval from shareholders. The deal was reached late on Wednesday. EU ministers must approve it, although this is considered a formality. The UK, which hosts Europe’s biggest financial services centre, was opposed to any of caps on bank bonuses.
Such opposition means nothing.
The EU exists to regulate, to control, and it knows that this new regulation will drive business OUT of the UK, as the City of London has made clear. To the Eurocrats, that is a price worth us paying.
But beyond that there is the deeper point as to who controls the decision making process of business. The EU has decided it will set the standards. What can go wrong with that then?