Topical question asked in the House of Commons, by Jo Swinson (Liberal Democrat). It was answered on Thursday, 12 February 2009 on behalf of the Treasury.

Topical Questions

Question: This week, one banker has described a salary of £1 million as ““modest”” and RBS has proposed obscene bonuses of £1 billion. Will the Chancellor now stand up for the taxpayers who own great chunks of the banks and demand a freeze on bankers' bonuses?

Answer: The hon. Lady will be aware that when we recapitalised the banks in October, we imposed restrictions on the payment of cash bonuses to board members. I believe that bonuses should reward success, not failure, and many people who work for banks are not well paid in comparison with some of the people at the top. If the former work hard, they should be rewarded for doing so. I agree with the hon. Lady that people who are associated with the losses should not receive anything, and we must end the culture that has encouraged people to take reckless risks that the boards of the banks patently did not understand. It has had disastrous consequences for them, for this country and for the rest of the world.

Secondary information