Labour says it would extend bankers' bonus clawback to 10 years

The pledge would extend the current seven-year clawback period

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The Independent Online

Labour has said that bankers who engage in "inappropriate behaviour" could face having their bonuses clawed back up to 10 years after they were awarded if the party comes to power in May.

The pledge, part of a package of reforms to be unveiled on Friday, would extend the current seven-year clawback period, seen as one of the toughest in the world, because of the length of time it can take for banking scandals to emerge.

Shadow Chancellor Ed Balls will say that the latest allegations that HSBC's Swiss banking arm had helped thousands of clients to avoid paying UK taxes dating back to 2005 justify the extension.

"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."

 

Balls will also outline plans to fund the party's promised British investment bank, aimed at providing funds for small and medium businesses, proceeds of a planned increase in the licence fees for the mobile phone spectrum.

That could raise up to £1 billion over the next parliament, according to estimates.

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.

Additional reporting by Press Association

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