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UK government under attack from the City

The UK government is today under attack from the City after announcing new powers for the Financial Services Authority (FSA) which will give them the authority to "rip up" legally binding contracts between employers and employees. It is believed that if these legally binding documents are in direct conflict with the UK government's regulations on bonuses and salaries then the FSA will be within their rights to step in and make changes. So what are the consequences?

The problem for the City of London financial markets is the fact that in order to attract the best minds from around the world there is a need to give them the best packages which includes salary and bonuses. Who would leave a job tomorrow to sign an agreement with a new employer if this agreement could be rescinded overnight?

While the government is obviously looking to keep voters happy in the run-up to the election there is a feeling that the balance has tipped far too far in favour of consumers leaving the UK business arena severely weakened. Let's not forget that the UK financial sector is the most prominent part of the UK economy, producing billions upon billions of pounds of taxes a year and supporting hundreds of thousands of jobs.

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