Prime Minister needs to stand up for businesses, not wave through bumper bonuses at RBS
Commenting on reports that David Cameron has called a 'truce' on bankers' bonuses and will wave through the RBS bonus pool, Shadow Business Secretary Chuka Umunna MP said:
"It is extraordinary that the Prime Minister should set himself against the grain of investor opinion, like that of the Association of British Insurers, which has said there cannot be a return to business as usual and that we have not seen the change required.
"The culture of excessive pay is being challenged by shareholders but despite his rhetoric the Prime Minister - who heads a government which is the largest shareholder in RBS - sits on his hands and refuses to practice what he preaches on shareholder activism. As the Association of British Insurers has emphasised we need to see responsibility across the banking sector, which has benefitted from £1.2 trillion of taxpayer support.
"A year ago, the government announced the Project Merlin agreement and promised that bankers' pay would be linked to business lending. Yesterday we learned that the banks have missed their targets on lending to small businesses under the failed Project Merlin deal, while according to the Bank of England net lending to business has fallen by more than £10 billion in the past year.”
"Given that RBS has been blamed for the banks collectively missing their small business lending targets, what does the Prime Minister's decision to wave through bumper bonuses at RBS say to firms struggling to get the finance they need to survive or expand up and down the country? It says this out of touch Prime Minister will not stand up for our businesses and entrepreneurs.
"Labour, the Federation of Small Business and others have been calling on the government to implement their credit easing scheme but, four months on, business is still waiting for it to be brought into force by this out of touch government. As part of Labour’ s five point plan for jobs and growth we would repeat the bank bonus tax to create 100,000 jobs for our young people.”