Bankers’ pay cap: should they earn the same as civil servants?

Bankers should be paid no more than civil servants, a former senior advisor to David Cameron has proposed.

Steve Hilton, who is now working as an academic in the US, made the suggestion during a BBC interview to promote his new book, More Human.

“If you are a company that requires bailing out, should you go wrong then you should be considered part of the public sector and the pay of your executives should be capped at the same level of civil servants’ pay levels,” he said.

“I think that would be a powerful incentive for these companies to choose what they want to be… they might decide to actually split themselves up.”

Top civil servants receive £100,000 to £200,000 a year compared to multi-million pound salaries for bank bosses.

Mr Hilton also said he wanted the competition authorities to become much more intrusive in banking, but also in the supermarket sector, which he said did not act in the best interests of consumers or suppliers.

He said: “I think the competition authorities need to be much more aggressive generally and specifically where you have a concentration of power.

“They should be using their powers to make the market more competitive, now whether that is breaking them [banks or supermarkets] up or other means is for others to debate.

“The system ought to be geared to help the insurgents and not to protect the insiders.”

Hilton argues that a fairer Britain would be good for the economy too, as it would remove the distrust of big business that many voters feel.

The chief executive of the British Bankers’ Association (BBA), Anthony Browne, told BBC Radio 4’s Today programme: “I think these proposals are great at generating publicity for Steve Hilton’s book, but if any government were to take them seriously they would cause catastrophic damage to what is still a leading sector of the UK economy and the biggest exporter and one of our biggest tax payers.”

He said bank bonuses had fallen 80 per cent over the past five years while they had increased in other sectors of the economy.

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