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Banking: Bonuses

My Lords, in 2009 the Prime Minister said that no bonuses of more than £2,000 should be paid to bankers while banks were in receipt of government support. The coalition agreement talked about robust action and detailed programmes to handle unacceptable bonuses. On that we have heard nothing at all. When we proposed disclosures about remuneration under the Walker report, this was supported by both the Conservative and Liberal parties. The Government have done nothing to implement the Walker recommendations. The Minister asked for ideas. I will give him four. First, shareholders should be given a clear fiduciary responsibility, for which they can be held accountable under law, to take appropriate action to oversee the companies in which they have invested their clients’ money. Secondly, banks should not be able to offset the past losses against current corporation tax liabilities while they are in receipt of central government support, which most of our major banks still are through the special liquidity scheme and the credit guarantee scheme, as a consequence of which very few will pay any corporation tax for the foreseeable future. Thirdly, there should be a charge for the capital that banks effectively enjoy through the state guarantee. The Bank of England has estimated that this is worth £100 billion. A fair charge for that would be of the order of £12 billion to £15 billion—the annual charge for risk for capital, which the Minister will understand—rather than the derisory £2.5 billion pounds which ultimately, but not initially, will be raised under the Government's bank levy proposal. That is a considerably smaller amount than was raised under the bank payroll tax. Finally, if the Minister finds the RBS employment agreement with Mr Hester unacceptable, he can terminate it and replace it with a new one. Will he do so, because the people of this country will not accept a situation in which in excess of 5,000 people working in British banking will receive total remuneration in excess of £1 million per annum? This is totally acceptable and we are entitled to a decent answer from the Minister to these questions on bonuses, rather than the blather that we have heard about other matters.