Government criticised over RBS bonuses


The government has been accused of "sitting idly by" and allowing the predominantly state-owned Royal Bank of Scotland to pay out bonuses despite posting £8.2bn losses.

Conservative backbencher Philip Davies said it was "ridiculous" that the government could not get pay under control at the 80% state-owned bank while ministers "lecture" private sector companies about pay and bonuses.

RBS set aside £576m for staff bonuses in 2013, of which £237m went to investment bankers; the bonus pot is down 15% on the previous year.

During exchanges on future Commons business on 27 February 2014, the Shipley MP asked: "Can we have a debate on the proper role of governments and shareholders in the setting of pay and bonuses in the private sector?"

Responding, the leader of the House, Andrew Lansley, said bonuses were coming down at the bank and denied the government was lecturing companies.

"I think we are being clear about what we regard as social responsibility and that companies have a responsibility that extends not only to their shareholders and to their employers but to the wider society I think that's something all companies should recognise," he said.

The minister added: "Where government has a substantial shareholding of course we should use that shareholding similarly in a socially responsible way in so far as we're aiming and we have seen a substantial reduction in bonuses in the banking sector, that's something I know is occurring in those companies in which government has a shareholding too."

Shares in RBS have fallen sharply after the troubled bank reported its biggest annual loss since being rescued by the UK government during the financial crisis; and wiped almost £2bn off its stock market value.

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