The Mayor of London has attacked European Union plans to cap bankers' bonuses, warning it would play into the hands of London's overseas rivals while undermining support in Britain for the EU.
Labour Treasury spokesman Chris Leslie has said the European Union's move to cap bankers' bonuses should have been "driven by George Osborne", and that the Government had been "dragging its heels" over banking reforms.
Othmar Karas, the Austrian member of parliament part of introducing a cap on bankers' bonuses in the European Union has said the proposal was to bring in "fairness and responsibility" into the industry.
The attack on banker bonuses would hurt ordinary workers, UK Independence Party spokesman Godfrey Bloom said today in response to the European Union's move to cap bankers' bonuses.
Mr Godfrey said: "This move is the European Parliament getting the boot into bankers for a bit of political pleasure, but it is totally misguided.
"It may give the EU a dirty satisfaction to punish financial people it hates, but this agreement just hurts ordinary workers and the economy in general."
RBS chief executive Stephen Hester has told ITV News' Economic Editor Richard Edgar that the European Union's decision to cap bankers' bonuses should not be targeting the industry.
Mr Hester said: "Why just one industry? What other industries do you want caps on and income policies, then you have the question of does your economy then thrive based on that central control?"
Trade union Unite has attacked RBS chief executive Stephen Hester for not backing the proposed EU cap on banker bonuses.
Instead of setting an example to the world and supporting a cultural shift in the banking industry, Stephen Hester refuses to back the EU cap.
As the head of Britain's biggest bank he should be showing more leadership and drive change.
– Dominic Hook, Unite national officer
There would rightly be an outcry if those at the top took rewards that are undeserved.
Hester has warned that a proposed cap on banker bonuses will chase “economic activity ... to where the playing field is more favourable".
RBS chief executive Stephen Hester has warned that a proposed cap on banker bonuses will chase “economic activity ... to where the playing field is more favourable".
On the day the bank announced losses of £5.2 billion, Hester defended his record and justified his bonus.
“We're doing a lot for this country from a very big mess,” he said.
The Confederation of British Industry (CBI) has hit out at European Union proposals to cap bankers' bonuses at a year's salary.
These proposals fly in the face of efforts to align pay and performance.
They would significantly constrain shareholders' ability to hold companies to account by voting on pay policy and implementation, and to select board members.
Ratios will also make it harder for companies to respond to a downturn by adjusting pay, which undermines financial stability.
– Matthew Fell, CBI director for competitive markets
We're concerned that this proposal sets a dangerous precedent and could spill over into other sectors, damaging jobs and growth.
Michael Noonan, Ireland's finance minister, has talked up the EU’s proposed financial reform package, which includes a cap on banker bonuses.
Noonan, who led the negotiations for the 27 governments in talks last night, said: "This overhaul of EU banking rules will make sure that banks in the future have enough capital, both in terms of quality and quantity, to withstand shocks.
"This will ensure that taxpayers across Europe are protected into the future."
London Mayor Boris Johnson has attacked EU plans to cap banker bonuses.
He said: "People will wonder why we stay in the EU if it persists in such transparently self-defeating policies. Brussels cannot control the global market for banking talent. Brussels cannot set pay for bankers around the world.
"The most this measure can hope to achieve is a boost for Zurich and Singapore and New York at the expense of a struggling EU.
"This is possibly the most deluded measure to come from Europe since Diocletian tried to fix the price of groceries across the Roman Empire."