Labour would not reinstate a cap on bonuses for bankers if the party wins the general election, the shadow chancellor has said.

Rachel Reeves said she instead wants to be a “champion” of the financial services sector as she bids to drive up economic growth.

The cap was introduced in the wake of the 2008 financial crisis to limit annual pay-outs to twice a banker’s salary.

But it was scrapped last year after a decision was made in Liz Truss’s brief spell in No 10 by her chancellor Kwasi Kwarteng.

Ms Reeves’ decision to continue allowing unlimited payouts to bankers marks another major shift in Labour’s direction, with Jeremy Corbyn having labelled the financial sector “speculators and gamblers who crashed our economy” during his leadership of the party.

In an interview with the BBC, Ms Reeves, a former Bank of England economist, said: “The cap on bankers’ bonuses was brought in in the aftermath of the global financial crisis and that was the right thing to do to rebuild the public finances.

“But that has gone now and we don’t have any intention of bringing that back.

“And as chancellor of the exchequer, I would want to be a champion of a successful and thriving financial services industry in the UK.”

The move comes as Labour was pledging to “unashamedly champion” the financial services sector as it seeks to win over big business in the election year.

Ms Reeves and other senior Labour figures had been vocal critics of the Tories’ decision to axe the cap during a cost-of-living crisis.

Just three months ago, the shadow chancellor criticised the move to allow unlimited bonuses to be earned again “in the midst of their cost-of-living crisis”.

“It tells you everything you need to know about this Government,” she said.

Labour leader Sir Keir Starmer is bound to face further criticism from the party’s left.

The SNP’s social justice spokesman David Linden accused him of “offering no change from broken Brexit Britain”.

“By admitting he would slash funding for public services, while helping the super rich, Starmer has shown he has the wrong priorities and is on the side of the wealthy Westminster elite, not ordinary working families,” he said.