Speeches sourced from the Labour party’s online archive More…

Simon Danczuk MP has today written to David Cameron calling on him to explain to the House of Commons why he did nothing to stop Stephen Hester’s bonus. Simon Danczuk said:

“Rather than stopping this bonus, David Cameron took the decision to nod it through.

“The public own Royal Bank of Scotland and they deserve an explanation. Instead, Conservative ministers have been running scared – dodging the cameras rather than justifying this disgraceful failure of leadership from David Cameron.

“That is why I have today written to the Prime Minister to ask him to come to the House of Commons to explain why, when he should have blocked this million pound bonus, he decided to do nothing.”

The text of the letter is as follows:

Dear Mr Cameron,

Last year you told the House that “The reason we have difficulties with the Royal Bank of Scotland this year is the completely inadequate contract that was negotiated by the Government whom the right hon. Gentleman [Ed Miliband] supported” (Hansard, 12 January 2011, column 279), and that the Government was “bound by a contract that was signed by the previous Government” in relation to bonuses paid out to Stephen Hester and other executives at the Royal Bank of Scotland (Hansard, 2 February 2011, columns 855-856).

However, since then it has emerged that Stephen Hester has no contractual right to a bonus, and that his participation in any Bonus Scheme is at the discretion of the Remuneration Committee. Indeed, you yourself acknowledged in November that as the Government is a major shareholder in RBS, “we can stop the £500m” in bonuses reportedly due to RBS executives (BBC Radio 2 Jeremy Vine Show, 10 November 2011).

And your Business Secretary, Vince Cable, said in September that “certainly the Government through its shareholding body which is the UKFI could have intervened [in relation to the pay of the Chief Executive of RBS] but we took the view that he and the new head of Lloyds, the other partly state-owned institution, should and are turning around a taxpayer-run institution” (BBC Radio 4 Today Programme, 19 September 2011).

Given that you and senior members of your Government are on record acknowledging that you do have the power to intervene to reduce the bonuses paid to Stephen Hester and other senior executives at taxpayer-owned banks, I trust you will want to come to the House to explain why you previously told the House that you did not have any such power, as well as to explain why your Government has decided, in its role as the majority shareholder in RBS, to approve a bonus to Stephen Hester worth almost £1 million.

Yours sincerely,


Simon Danczuk MP

Keyboard shortcuts

j previous speech k next speech