LABOUR’S shadow chancellor Rachel Reeves yesterday pledged any future Labour government to be the bankers’ best friend, ready and willing to facilitate awarding massive million pound bonuses while the working class sink into poverty and mass unemployment.
Reeves, a former economist at the Bank of England, told the BBC that Labour would not reinstate any cap on the bankers’ bonuses.
In 2004, a maximum cap was introduced on the bonuses bankers were allowed to pay themselves across the European Union.
Bonuses could not exceed double their annual pay.
The stated aim of this cap on bonuses was to act as a deterrent to what was held to be the excessive risk-taking by the banks blamed for causing the crash of the world banking system in 2008.
In fact it was a sop to the working class of Europe and the UK which was being subjected to a vicious regime of austerity cuts to wages and public spending – an attempt to prove that bankers responsible for the crisis would suffer as well by having their bonuses held at just 200% of their million pound plus annual pay.
Bankers’ demands for unrestricted rights to earn billions while workers and their families were forced to use food banks was met by the short-lived disastrous government of Liz Truss.
Despite the fact that her budget nearly collapsed the economy with its unfunded tax cuts to the rich, the policy of scrapping any restrictions on the banks was carried on by Rishi Sunak.
In October last year, when the plan to ditch the cap came into effect, Reeves hit out at the decision on X (formerly called Twitter) claiming that scrapping the cap in the midst of a cost-of-living crisis ‘tells you everything you need to know about this government.’
She shared a statement from the TUC that ending the cap on bankers’ bonuses would fuel a ‘greed is good’ culture’.
Three months after making this damning assessment, Reeves has done a 180 degrees U-turn, saying she would not reverse ending the cap as she wants to ‘champion a successful and thriving financial service industry.’
Reeves told the BBC: ‘The cap on bankers’ bonuses was brought in in the aftermath of the global financial crisis and that was the right thing to do to rebuild public finances. But that has gone now and we don’t have any intention of bringing that back. And as chancellor of the exchequer, I would want to be a champion of a successful and thriving financial services industry in the UK’.
Reeves and the Labour leadership have openly declared themselves to be the party fit to take over and run Britain for the benefit of the bosses and bankers, and her statement tells workers everything they need to know about any future Labour government.
While Reeves and Starmer are prostrating themselves before the bankers, the actual news on the real state of British capitalism was revealed in the latest statistics for company bankruptcies last year.
In England and Wales, the number of companies going bust hit a 30 year high with over 25,000 insolvencies registered in 2023, and a further 30,000 predicted to collapse in 2024.
Starmer and Reeves have long made it clear that they are only prepared to pay workers what bankrupt capitalism can afford and attacked pay demands by junior doctors and rail workers as ‘unaffordable’.
But there must be no limit on the amount of money the bloated handful of bankers can award themselves for these treacherous Labour supporters of capitalism.
The banks were kept from collapse in 2008 by the trillions of worthless paper money pumped out by the central banks, and the super austerity regime imposed on the working class that has driven millions into poverty.
The working class has had enough of this Tory austerity, and they will not accept a Labour government that carries on this class war for the benefit of the bankers and bosses.
The trade unions must now break decisively with this right-wing Labour Party and call a general strike to bring down the Tories and go forward to a workers government that will nationalise the banks and large industries under a planned socialist economy.