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REAL LIVES Wonder women BY NATHAN RIDER Unite MEP Arlene McCarthy sees off George Osborne and the fat cats

EU fat cat bankers’ bonus cap

A new Europe-wide cap on outrageous banker bonuses will help restore economic security for all as well as boosting job security for millions of ordinary bank workers, says the MEP and Unite member behind the moves.

Arlene McCarthy

Arlene McCarthy, Labour’s economic affairs spokesperson in the European Parliament, has helped see off an attempt by Chancellor George Osborne to tear the heart out of new rules aimed at ending the recklessness that led to the 2008 economic crash. As vice-chair of the economic and monetary affairs committee, she drew up the 2010 rules which will cap bonuses at a year’s salary (or double that with the agreement of shareholders).

The new rules allow a trader earning £236,000 to take home a total of £708,000 including bonuses, where previously bonuses have let some stuff their pockets with additional millions.

“It’s about the top end, the elite,’ said Arlene McCarthy after the amendments were defeated by 26 to one in April, following a reform campaign strongly backed by Unite. “The ordinary person working in the bank is not taking home these kinds of bonuses. Now that we have a safer and more stable banking model, their jobs will be safeguarded in the long term.”

Legal changes at a European level or higher are crucial in dealing with the financial sector, which straddles national boundaries. But in their rearguard action against the measures, the Chancellor and Mayor of London had left Britain isolated among the 27 EU member states.

“This government is quite happy to put a cap on public-sector pay. Why not put a cap on bankers’ pay, which has actually led to the excessive risk-taking culture which means we’re in the mess we’re in?” she asks.

Recent polls show 76 per cent of the public wanted a cap on bankers’ pay, and that a huge majority want the banks to be answerable for recklessness and rule-breaking. The financial sector had made no moves to limit bonuses despite being put on notice in 2010.

Limits have now been placed on up-front cash bonuses, so traders don’t get to walk away with stuffed pockets when a bank’s investments turn sour. Instead bonuses will be in shares, equities, bonds, or debt instruments, so it will be in the personal interest of the wheeler-dealers that the bank remains robust.

“It’s a new structure with the objective to stop the excessive-risk culture which led to the taxpayer bailouts and bank collapses,” said Arlene, a Labour North- West MEP. “It will end a totally unsustainable and unjust banking model.”


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