Osborne targets top banking bonuses
Updated on 26 October 2009
Stop the high street banks from paying out big cash bonuses. The cry of a modern day Lenin? Well actually it is the policy of the Conservative shadow chancellor, George Osborne. Jon Snow reports.
Osborne, who revealed his rob the rich credentials today in a speech to the city, urged a limit of £2,000 on cash bonuses for British high street banks, so that the money could be used instead as loans to businesses and individuals.
He has called for emergency measures to prevent the banks paying out cash bonuses to top executives.
He told the audience in London's Docklands that any surplus cash should be used to support new lending for hard-pressed small businesses - with high-performing staff rewarded instead in the form of shares.
He said it would be "inexcusable" for banks to pay out big bonuses when there were so many businesses that needed that cash.
His call comes amid growing anger over bonuses this year expected to run into billions of pounds in the City of London.
He said he was talking about "emergency measures this Christmas" and told GMTV: "Let's end the big cash bonuses. If there's spare cash at the bank it should be lent out to small businesses, medium businesses, to help people keep their jobs.
"This is still a credit crunch, and it would be inexcusable for banks to pay out big bonuses to their staff, when there are so many businesses that need that cash."
He stressed he was not talking about "people at the cash tills".
"What I am talking about are the big cash bonuses in the investment banking arms, in some of the retail banking arms.
"That cash, if it's available, should be lent out to small businesses watching this programme, and for the people who work in companies who are lacking credit at the moment, because we've got to keep people in work."
Liam Byrne, chief secretary to the treasury, has accused Mr Osborne of "hypocrisy" and playing politics with the recession over the idea, which he is due to outline in more detail later today.
Mr Byrne said: "Mr Osborne's hypocrisy beggars belief. The Tories have fought against every plan we've delivered to support jobs and businesses. And if we withdraw support now as Mr Osborne wants the recession will be longer and deeper.
"We have already introduced the toughest bank remuneration policy in the
world. We have stopped short of banning all bonuses for retail banks because it
is unworkable but we are presently negotiating with RBS and Lloyds on the
payment of 2009 bonuses."
