The Prime Minister said he would veto any attempt by RBS to increase its
overall pay and bonus bill but did not say the Government would reject
individual awards
David Cameron has given the green light to the Royal Bank of Scotland
to hand staff shares worth more than double their salaries as bonuses.
The PM
said he would veto any attempt by RBS to increase its overall pay and
bonus bill but did not say the Government would reject individual pay
awards.
As RBS is cutting staff, it could still pay 200% bonuses
to its remaining investment bankers on more than £400,000 a year without
increasing its overall pay and bonus bill.
Labour’s Treasury spokesman Chris Leslie accused the PM of misleading MPs over the Government’s stance.
“RBS
has been reducing the number of bankers on their roll by about 2,000
bankers less in the last year,” he said. “You’d expect their total pay
bill to actually start to fall, so it should.
“But it still
doesn’t get out of the question about those individual senior bankers,
those earning £400,000 or more, whether the shareholder, in this case
the Chancellor, is going to give them permission not just to have
bonuses of 100% of their salary but to bust through that and go to 200%
of their salary.”
Shadow Foreign Secretary Douglas Alexander said
the public would think it “intolerable” if RBS rewarded its staff so
handsomely when it was losing money and failing to lend to small firms.
Under new European Union rules, banks have to get approval from its
shareholders if they want to pay bonuses of more than 100% of salary.
Chancellor George Osborne is in charge of the taxpayer’s major shareholding in RBS and could give permission
But he is fighting the rules anyway, claiming they will see banks paying more in salaries.
“It will lead to a situation where you will not be able to get money back off bankers when things go wrong,” he said.
He
was backed by Bank of England Governor Mark Carney, who gets £900,000
in pay and perks. He said he was opposed to a “crude cap on bonuses”.
If RBS does decide to award 200% bonuses next year, shareholder approval would have to be sought.
The bank is still heavily loss-making and has faced serious allegations over its treatment of small businesses.
Labour
leader Ed Miliband will today suggest limiting the size of the big five
– RBS, HSBC, Barclays, Santander and Lloyds – to encourage more
competition and will help consumers and small businesses.
“We have
got to give customers more choice,” said Mr Leslie. “Fees and charges
are too high. There is not enough of a sense of competition, a hunger
among the banks to serve customers.”
