Saturday, 26 April 2014

Government vetoes huge payouts for RBS bankers - while fighting to scrap EU cap

Ryan Fletcher, in the Morning Star

Attempts by gluttonous bankers at Royal Bank of Scotland (RBS) to hand themselves bonuses twice the size of their salaries were blocked by the government yesterday.

But the Unite union accused the coalition of hypocrisy for continuing its legal challenge against the EU cap on bankers’ bonuses — the very same legislation used to leash state-owned RBS.

Under new European rules banks require shareholders’ approval to award bonuses up to 200 per cent of fixed pay, otherwise they can be no more than a banker’s salary.

As the government owns 81 per cent of RBS it was able to veto executives’ attempts to award themselves the massive cash handouts.

Using the powers has not stopped the Tories launching legal action to scrap the cap. 
Unite national officer Dominic Hook said: “The truth is the UK government opposes the EU cap on bankers’ bonuses and is even challenging the cap in the courts on behalf of their pals in the City. 

“The Treasury knows its real position on bankers’ pay is deeply unpopular so it’s blocking RBS.

“If the government wants to put its money where its mouth is and really change the bonus culture then George Osborne has to stop wasting taxpayers’ money defending fat bonuses in Europe.”

Barclays won the support of shareholders for payments of up to 200 per cent of salary yesterday while also introducing new role-based pay awards that mean staff can still pick up bumper handouts. 

The payouts come despite a wave of redundancies for ordinary staff at the bank.

Left Economics Advisory Panel co-ordinator Andrew Fisher said: “The bonus culture at Barclays is only a facet of its unadulterated antisocial behaviour: despite making a profit of £5.2 billion last year, the bank announced it would shed 12,000 staff. 

“And it maintains a network of around 300 subsidiary companies based in tax havens, to facilitate the sort of tax avoidance that saw it pay UK corporation tax of just 2.4 per cent in 2009.

“Barclays is the epitome of a nihilistic cannibal capitalism that strips jobs, pay and wealth from the many to give riches to the few.” 

Labour welcomed the reining in of RBS but queried the government’s permission for Lloyds, in which the Treasury has a 25 per cent stake, to pay 200 per cent bonuses.

Shadow Treasury minister Cathy Jamieson said: “The government has bowed to pressure on RBS and finally admitted that bonuses of two times salary would be unacceptable at what remains a bank in government ownership.

“But confusingly at the same time the Chancellor is supporting higher bonuses in Lloyds Bank and elsewhere.

“The Chancellor should accept the logic of today’s announcement and drop his legal action to block the bonus cap.”

A Treasury spokesman said Lloyds could award the bonuses because the bank has completed its restructuring, whereas RBS has not.

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