Coalition faces bank bonus pressure


The Government is braced for pressure over bankers' bonuses as the UK's top financial institutions prepare to pay out millions

Ministers are braced for more pressure over bankers’ bonuses amid speculation that efforts to limit payouts have failed.

Downing Street stressed it could not “micromanage” financial institutions, seemingly indicating that efforts to reduce the looming multi-billion pound bonus round had failed.

Instead, the coalition is believed to be focusing on increasing transparency and securing more lending for small businesses.

The part-nationalised banks – Royal Bank of Scotland and Lloyds TSB – will be expected to pay the lowest bonuses following public warnings from David Cameron and Nick Clegg.

RBS chief executive Stephen Hester is reportedly in line for £2 million, but the award will be in stock rather than cash.

Deputy Prime Minister Mr Clegg told BBC Radio 4’s Today programme: “These state-owned banks wouldn’t be in existence if it wasn’t for the generosity of taxpayers. The directors of those banks have been asked to do a job: to fix those banks and make them healthy again. That job isn’t complete yet and until it is I think that should be reflected in their remuneration.”

He added that the “sky high” seven-figure bonuses pocketed by some bank bosses “seem to come from a parallel universe to many people”.

Meanwhile, Labour leader Ed Miliband called for the Government to extend the tax on bankers’ bonuses which raised £3.5 billion last year.

He said: “We believe the extension of the bonus tax for another year is not only fairer, but more responsible.”

The debate over bonus payouts could be inflamed further when controversial Barclays chief executive Bob Diamond gives evidence to MPs. Mr Diamond is said to have been awarded £8 million this year.

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