MPs waver over bashing bank bonuses
CHANCELLOR George Osborne gave a confused view on the banker-bashing bonus debate yesterday, at first calling them “unacceptable” and then castigating others for creating an “anti-business culture”.
Speaking at a dinner held by the Federation of Small Businesses, Osborne (pictured) said: “Of course rewards for failure are unacceptable – and those who believe in the free market are the first to say so. But… there are those who are trying to create an anti-business culture in Britain – and we have to stop them.”
But parliament also delivered a mixed message yesterday evening as Labour’s opposition day motion to reintroduce a 50 per cent bonus tax was defeated by 295 to 244 votes, despite lacklustre turnout on the government benches.
The motion, which was originally intended to be a vote purely on RBS chief executive Stephen Hester’s bonus until he waived it, is non-binding but is a potent symbol of parliament’s will.
It called for employee representation on remuneration boards and a permanent reinstatement of Labour’s one-off bonus tax for all banks “directly or indirectly supported by the taxpayer”.
Shadow business secretary Chuka Umunna said it should apply to all banks because even those not bailed out get an “implicit subsidy” from being too big to fail – a claim disputed by Barclays.
Umunna said: “We are [talking]… about the enormous sums paid to investment bankers and a select few senior executives in the sector.”
He added: “If the claim that we are all in it together is to mean anything, the reintroduction of that [bonus] tax is a must.”
But Umunna came under fire for his past as a lawyer in which he drew up bonus package agreements for banks. In response he argued: “My experience of advising… on such arrangements has convinced me that we must reform the way in which the system works.”