Labour to extend bonus clawback

Monday 16 February 2015

Bankers who engage in "inappropriate behaviour" could have their bonuses clawed back ten years after they were originally paid if Labour regains power at the general election in May.

Shadow chancellor Ed Balls said a Labour government would extend the UK's current seven-year "clawback" period - already seen as one of the toughest in the world - to at least a decade.

Publishing the party's banking reform paper, he said the latest allegations that HSBC's Swiss banking arm had helped thousands of clients to avoid paying UK taxes dating back to 2005 underlined the need for an extended period.

"As we have seen in recent days, wrongdoing can take years to uncover. The current proposals to claw back bonuses are too weak and do not cover a long enough period of time," he said. "We will ensure people involved in misbehaviour and misconduct would have to give back their bonuses for at least a decade after they have been paid out."

Mr Balls said a Labour government would also use the proceeds of a planned increase in the licence fees for the mobile phone spectrum - estimated at up to £1 billion over the next parliament - to finance the party's promised British investment bank, providing funds for small and medium businesses.

The Conservatives dismissed the proposals, saying that the Bank of England was already consulting on extending the clawback period to ten years.

"A banking reform plan written by Ed Balls is like a fireworks safety guide written by Guy Fawkes - nobody will trust a word he says," a spokesman said.