Page last updated at 10:24 GMT, Sunday, 21 September 2008 11:24 UK

Brown considering City bonus curb

By Brian Wheeler
BBC News, Labour conference, Manchester

Gordon Brown
Mr Brown has been talking up his financial stewardship

Gordon Brown has told the BBC he is considering a crackdown on "irresponsible" City bonuses.

The prime minister told BBC One's Andrew Marr show the bonus culture encouraged "excessive" risk-taking.

He said it was difficult to regulate as bonuses were part of a global system, but the Financial Services Authority was looking at possible curbs.

He also admitted he had to "do better" as PM but he still thought he was the best person to lead the country.

Mr Brown, who is in Manchester for Labour's annual conference, once again stressed his economic experience and hailed the government decision to introduce a temporary ban on speculative "short selling" aimed at boosting stability in the markets.

And he said the financial crisis of the past week had given him the opportunity to renew his push for reform of the global financial system.

'Short-term deals'

Mr Brown said: "We are a pro-business government, we are pro market. But it will help business best if we can clean up what went wrong."

I think there's an element of the bonus system that is unacceptable
Gordon Brown

Asked if "greedy" City traders had let down the country he said: "I think it's fair to say there's been a great deal of irresponsibility.

"We have to recognise that mistakes have been made in the City but principally in America - this has come out of America."

He added: "I think there's an element of the bonus system that is unacceptable. When you get bonuses and salaries based on short term deals that have no relationship to long term performance then you have to look again at what the system is doing."

Mr Brown said the FSA was drawing up a report on ways of curbing bonuses, which are paid annually to traders.

But he acknowledged that legislation to curb bonuses might not be appropriate.

"I think it's difficult to do that because we are dealing with a global economy," he said.

"I think what we need now are international rules."


Most of the 350,000 workers in London's financial services industry get some kind of annual bonus, with thousands getting more than 1m and a handful reportedly being awarded as much as 10m.

Labour's left has long called for curbs on the payments but until the past few weeks ministers have resisted them on the grounds that they were the product of market forces.

Leading left-winger John McDonnell, who failed to gain enough nominations to challenge Mr Brown for the party leadership last year. said: "Some of the finance houses which have created this crisis are now going to reward themselves something like 2bn worth of bonuses.

"That's offensive to all of us."

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