Removing banker bonus cap isn't to help the people at the bottom, says economist
21 September 2022, 15:58 | Updated: 21 September 2022, 16:15
Getting rid of the bankers' bonus cap is 'exactly the right thing to do', thinks Dr Andrew Lilico.
Economist and Columnist Dr Andrew Lilico tells Nick Ferrari "it is a mistake to imagine all policies' value is to help people at the bottom".
Reflecting on the government's plan to scrap the bankers' bonus cap, Nick Ferrari asked: "How is it going to help people at the lower end, the people on living wage?"
"Well it's not really meant to help them, that's not what the point of the policy is," Economist and Columnist Dr Andrew Lilico stated.
Dr Andrew Lilico: "There are lots of other policies to help people at the bottom... it is a mistake to imagine that every single policy's only value is what it does for people at the bottom."
He described the original introduction of the bonus cap as a "rather crude measure".
The economist explained how the cap led banks to substituting those costs in bankers' wages.
"What happens is the bank still has to pay out just as high a based salary to the bankers and it makes the banking system less stable."
He concluded: "It is better if you get rid of the bankers bonus cap and I think it is exactly the right thing to do."
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