City backs mini-budget measures: ‘Scrapping bonus cap shows we are open for business’
Canada has welcomed measures in today’s mini-budget, backing the scrapping of bankers’ bonuses and freezing of cooperation tax hikes.
Policy Chairman at Canada Corporation Chris Hayward responded to Kwasi Kwarteng’s fiscal statement today, which included a raft of changes from planning and benefits to stamp duty and national insurance.
Following the mini-budget, the pound plummeted to a new 37-year low falling below against the US dollar, closing on $1.10.
The FTSE 100 was also dragged down by the news, dropping 1.8 per cent this afternoon.
He welcomed the move to freeze the cooperation tax rate at 19 per cent, saying it “sends a signal that we want to remain internationally competitive. It will help businesses unlock investment and I very much welcome it.”
“The sector and the City are a key engine of growth for the UK economy and this measure will support us in continuing to create jobs and drive investment across the country.”
“The financial and professional services sector contributes £100 billion in taxes annually. Banks have been taxed at a higher rate than other parts of the UK economy since 2015 due to the corporation tax surcharge.”
He also backed the scrapping of the cap on Bankers’ bonuses, which “will reaffirm the UK’s status as the world’s financial services centre.”
He however urged pay in the sector to “reflect performance and take account of the wider economic environment.”
Hayward said it “will give banks the flexibility to recognise strong performance and show restraint when necessary.”
“It demonstrates we are open for business.”
However, not everyone in the business world seems to feel that way.
Founder of S4 Capital and WPP, the world’s largest advertising and PR group, said that the banker bonus cap was a risky one.
Speaking with Nick Ferrari at Breakfast on LBC, Sorrell said: “This is going alienate people, we’re going through a very tough time. We are at war. We are at war against Russia, and we are at war economically because energy prices are not going to fall…”
“We can’t keen on spending like this… where is all of this money going to come from? Where’s it going to come from,” he added.
Sir Martin said there was a “disconnect” between what the right thing to do is and what Tory party donors want.
“The people that fund the Conservative Party want to see these sort of things happen and I think there’s a disconnect between what is the appropriate political approach and what fundraisers, or people who provide funds, want to see,” he told the radio station.