John McDonnell, the shadow chancellor, has said a future Labour government could ban bonuses in the City, unless the financial services industry curbs excessive pay-outs voluntarily.
“If it hasn’t learnt its lesson, we will take action,” he said in an interview with the Financial Times. “People are so offended by it. It’s a reflection of the grotesque levels of inequality that people now find so offensive. Action will be taken, full stop.”
For some people a four-day week is ridiculous because they’re desperate to get the hours just to survive at the moment” – John McDonnell
Challenged about the impact this would have on the London’s ability to attract global talent and how this drives big bonuses, McDonnell talked of the founder of the Richer Sounds which recently gave shares to the hi-fi chain’s employees.
What would he say to Rich Ricci, former chief executive of Barclays Capital, who was paid £44m in one year alone? “I’d point him towards Julian Richer,” replied McDonnell.
The shadow chacellor said he would launch a consultation looking at options ranging from increasing shareholder power to restrictions on the size of bonuses.
While the prospect of a bonus ban may seem extreme to many people in the City, many of McDonnell and Labour leader Jeremy Corbyn’s more radical left-wing thinking appears to have moderated in recent years.
Where Corbyn used to advocate a pay cap on all executives, Labour policy appears to have softened to a pay ratio of 20:1 between bosses and staff, but only for suppliers to the government.
In the FT interview McDonnell is asked if he’d be a pragmatist if Labour were elected, and it appears some of the more extreme ideas such as a four-day week are less likely to translate into policy.
“For some people a four-day week is ridiculous because they’re desperate to get the hours just to survive at the moment,” he told the FT. “But there’s another group of people working all the hours God sends and it impacts on their family lives.”
McDonnell also told the FT he wanted to put an end to share options and golden handshakes.