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Banking: Bonuses

My Lords, is my noble friend aware that the Government are absolutely right to get rid of the failed tripartite agreement that caused many of the problems that we now face? Does he agree that we are making some progress in reducing cash payments, deferred bonuses and so on? However, I have some difficulty with his argument that bonuses are all right so long as the banks lend more. That seems to be a non sequitur, except in the sense that if we agree to the bonuses, the banks may lend more. However, they ought to be doing that anyway. The two issues are not connected except in the sense of, ““We will be soft on you if you do what we want””. That is not the right approach. As far as concerns RBS and the other banks that have been bailed out by the Government, I understand my noble friend's point about the agreement made by the previous Government. However, given the extent of participation in those banks, ought there not to be clear representation on behalf of taxpayers and the Government on the boards of the banks so that those directors could take appropriate action—because at the end of the day it is the board that decides these matters—with regard to bonuses?