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Bonus Cap to Turn U.K. Bankers Against EU, Tory Lawmaker Says

The Swiss Re Insurance building, left, stands illuminated in the city of London. Photographer: Chris Ratcliffe/Bloomberg
The Swiss Re Insurance building, left, stands illuminated in the city of London. Photographer: Chris Ratcliffe/Bloomberg

European Union plans to curb bankers’ bonuses will push those working in London’s finance industry to join the campaign for Britain to quit the bloc, a leading euroskeptic Conservative Party lawmaker said.

“There are those in the euro system who can’t quite forgive the success story that is the City of London, and these spiteful proposals are deliberately designed to harm a U.K. national interest,” Douglas Carswell told Guy Johnson on Bloomberg Television’s “The Pulse” today. “I have advocated that the United Kingdom should withdraw from the European Union, and I think that message will now resonate with a lot of bankers.”

EU finance ministers wrangled with U.K. Chancellor of the Exchequer George Osborne this week over the proposal, which says bonuses can’t be bigger than salaries unless certain conditions are met. The pay rules were a late addition to wide-ranging EU legislation on how it will apply global rules to strengthen bank capital requirements.

Ireland, which holds the EU’s rotating presidency, pledged to iron out final elements of an agreement in coming weeks, even as Osborne said he “can’t support the proposal currently on the table.” Conservative Prime Minister David Cameron has pledged a referendum on the U.K. staying in the EU if he’s re-elected in 2015.

Carswell said he doesn’t expect the bonus proposals will cut bankers’ remuneration.

“All we’re going to see is a barrier against management rewarding good performance,” the Tory lawmaker said. “If Europe was the only part of the planet that did financial services, perhaps this measure wouldn’t really matter. But in an age where it’s very simple for banks to relocate and we’re competing with Dubai, New York, Singapore, I think this is another example of the euro elite imposing a very destructive measure that will actually lead Europe in aggregate to be much worse off.”

Carswell said the proposal raises “fundamental questions” about whether Britain should remain part of the EU. “I think many in the City of London will now be open to the suggestion that we should leave,” he said.

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