British Prime Minister David Cameron said yesterday (6 March) he wanted to ensure EU plans to limit bankers' bonuses did not threaten the national interest, but it later became clear that Britain is only seeking minor changes to what is almost a done deal.
Britain was left isolated at a meeting in Brussels on Tuesday after it failed to water down new European Union rules that will cap bankers' bonuses, a measure that could threaten London's dominance as a global financial centre.
In a lively exchange in parliament with the leader of the opposition Labour party, Cameron struck a defiant note on Wednesday, using language that stoked speculation his government might be contemplating invoking its national interest to try to delay or amend the draft EU directive.
"There is an important issue here. There are some important British national interests," Cameron told parliament. "We are responsible for 40% of the EU's financial services … [and] we want to make sure that international banks go on being headquartered here in the UK."
But his official spokesman later made it clear that Cameron's language did not signal any change in tactics on the issue and played down the idea that Britain might try to delay the legislation by arguing it threatens its national interest.
"The right thing to be doing is for there to be this process of discussion over the implementation of this directive," the spokesman told reporters, saying Britain would be seeking technical amendments in talks in the weeks ahead.
The issue is a tricky one for Cameron. On the one hand, he is under pressure to be seen to be protecting the City of London, a sector that former European Commissioner Peter Mandelson has likened to Britain's "golden goose."
But bankers have become public hate figures since the 2008 financial crisis and are regularly castigated by voters and politicians, making it politically difficult for Cameron to style himself as their defender.
Ed Miliband, the leader of the Labour party, on Wednesday accused Cameron and his finance minister of being the only people who felt it was "a priority to fight for bigger bonuses for bankers", using a by now familiar line of attack that tries to cast Cameron, who hails from a privileged background, as someone who rules for the rich at the expense of the poor.
But Cameron, who regularly accuses Labour of having mismanaged the economy before he came to power in 2010, said bankers' bonuses were a quarter of what they were under Labour.
"I don't have to listen to the croupier in the casino when it all went bust," he shot back at Miliband.
The European Union agreed landmark rules capping bank bonuses after an agreement between MEPs and governments was struck on 28 February.
The deal, which also increases the amount of capital banks must keep on their balance sheets, will cap bonus payments at the same level as the year's salary – but with the provision that the bonus could be doubled subject to majority shareholder approval.
The highly complex legislation – which is composed of a directive and a regulation – may yet be tweaked and it will need to be approved by EU governments before coming into force next year. Certain countries – such as Britain – oppose the move but cannot veto it.