Frustration in party ranks as Reeves rejects return of bankers' bonus cap

Senior Labour figures have been left annoyed and perplexed by the surprise announcement by Rachel Reeves that the party will not reinstate a cap on bankers' bonuses if it wins the next election.

- Pippa Crerar , Jack Simpson

The shadow chancellor said yesterday that she had "no intention" of bringing back the cap, introduced in the wake of the 2008 financial crisis to limit annual payouts to twice a banker's salary, saying she wanted to be the "champion" of a thriving financial services industry.

But her shift in position has frustrated some of her colleagues. One shadow cabinet minister said: "We have spent the last year and a bit saying what a terrible decision it was for the Tories to scrap the cap in the middle of a cost of living crisis. What has changed?"

Another source said: "I'm just not sure what the point of this is. It will be really unpopular with exactly the sort of voters we need to win over, including in the red wall."

A third added: "We've given quite a bit of reassurance already to businesses. I don't really understand the nervousness around this one."

In 2022, Kwasi Kwarteng, then chancellor, announced that he would be removing the rule as part of his now infamous mini-budget amid Liz Truss's short tenure as prime minister. It was one of the few policies that was retained under Rishi Sunak's leadership, with the new rules coming into force in October last year.