Euro MP condemns Government failure to ban RBS bonuses - 2012-01-27

Commenting on David Cameron's failure to block a 1 million pound bonus in shares for RBS Chief Executive Stephen Hester, Labour's Vice Chair of the European Parliament's Economic and Monetary Committee, Arlene McCarthy MEP, said today:

“The 2011 Remuneration Rules I drafted for the European Parliament that the Coalition signed up to and should have implemented, clearly give the Government, as the major shareholder in RBS, the power to ban bonuses for directors of bailed out banks. If the Coalition is serious about changing the culture of excessive pay and bonuses it should have made an example of a publically owned bank. 

“RBS's record in 2011 is dire - their shares have slumped more than 40% meaning that taxpayers face losses of around 23 billion pounds on the 81% stake held by the Government. Thousands of jobs have been lost with another 3,500 announced recently. RBS has also missed its lending targets to ensure enough credit for small and medium size businesses.

“Given RBS's poor performance, as a very minimum, if they weren't prepared to ban bonuses, the Government should have applied the Remuneration Rules which stipulate that 60% of bonuses must be deferred and paid in instalments for at least three years.

“Bonuses must be based on measurable improvement to RBS's stability and performance. Cameron must ensure full accountability to the UK taxpayer.

"Like Vince Cable's weak proposals for reforming executive pay announced this week, the Government should not give in to bullying by the banks on the basis that their directors will walk out.

"The Government must force banks to prioritise repaying taxpayers and strengthening their capital base over paying bonuses, as laid out in the 2011 remuneration rules.

"On Monday, we will be putting the spotlight on how the UK government has implemented the Remuneration Rules and if the have failed in their duty we will be calling for tough sanctions

"It is clear the Government has the power to ban these bonuses but bottled out.

The public will simply not understand why it failed to act to protect tax payers' money.

"The Coalition's defence is that Stephen Hester was "promised" this payout in his contract - yet the Government has no problem breaking their promises to guarantee public sector employees a decent pension and wage. “

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