The government’s plans to legislate to curb excessive pay and bonuses to bankers as outlined in the Queen’s Speech could be good news for recruiters.

The new legislation outlined in the Queen’s Speech could see excessive pay and bonuses contracts torn up, and fines imposed on banks that continue to offer unjustifiable remuneration.  The government wants to curb rewards for excessive risk taking that it believes threatens the stability of the financial system and the wider economy.

Mathew Halford, a director of Fortuna Search & Selection, told Recruiter that he feared many banks currently regulated in the UK would move elsewhere. “Even the threat of this legislation will mean people leaving the UK,” he added.

However, he said that any exodus of bankers out of the UK would be good news for recruiters who could help them move to other parts of the world such as the Middle East and the US. 

“A lot of Middle East firms in particular will be coming here for their talent. We could make a lot of money from it,” Halford said. He added that it could lead to more recruiters, especially the larger ones, opening offices abroad.

Commenting on the new powers to be given to the Financial Services Authority (FSA), Matthew Whelan, an employment solicitor at City law firm Speechly Bircham, says that parliament will have to be very careful in drafting the legislation if it is to have the effect the government desires. 

“It could lead to claims being brought by employees against the FSA if they do not exercise this power correctly. Parliament will need to make very clear when and how the power should be exercised. This could result in employers seeking FSA approval of proposed payments to avoid problems.”