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Banking: Bonuses

My Lords, I am always grateful to my noble friend Lord Oakeshott for reminding us of what is in the coalition agreement, which is always at the heart of what we do. I am sure that my colleagues in the Treasury will need absolutely no reminder of what the coalition agreement says in this area, because it is precisely because we are guided by the coalition agreement that we now have a package that, as I have explained, means that 2,500 banks as opposed to 25 are caught by the code. For all their talk, the previous Government had not actually brought in any new remuneration code. We now have one in place. We are continuing, as I said, to urge our European partners to work with us on a common set of banding disclosures. The current discussions are precisely to make sure that bonuses are lower than they would otherwise have been and that lending is higher. In respect of the Royal Bank of Scotland, as I said in the Statement, we found ourselves having inherited a most extraordinary agreement negotiated by the previous Government that put absolutely no restrictions on RBS’s payments and bonuses this year. We want to see RBS now not as a front-runner, which seemed to be where it was encouraged to be under the previous Government’s agreement, but as a back-marker when it comes to its bonus payments for this year.