I am happy to look at the case for this research. We understand the pain both of the banking sector and of the public sector quite well, and we are introducing reform to both.
But does the Minister understand the anger that is reflected in the response of public sector workers to the pre-Budget report, when they see the incomes being given, granted to or thrown at the banking sector? Does he not understand that he must take further measures in order to redress the balance? When the economy returns to good health, will he make public sector pay a priority for the Government?
Fixing the very poor level of public sector pay that we inherited was of course a priority for us, and that is why over the past 10 or 11 years the pay of teachers has gone up by 52 per cent., that of police officers by 57 per cent. and that of nurses by 65 per cent. I think that, by and large, we have fixed the investment gap that we inherited from the Conservatives, but as we move into the years ahead we have to prioritise halving the deficit over four years. That is why we are asking for pay restraint in the public sector, starting with public service leaders, whom we are asking to take a pay freeze next year.
On the Government’s proposal to tax banks’ bonus remuneration, are the Government yet in a position to say which of the 192 regulated banks it will apply to; what the main exempted categories are, be they shares or contractual agreements; and, as it will take a long time to suss out the difficult avoidance possibilities, whether they have ruled out the possibility of extending the policy into the next financial year?
I understand that the draft guidance has been published. The proposals that we have introduced are designed to bite on banking groups, but we remain open to the possibility of extending the legislation and the tax if the avoidance measures that some have talked about are put into practice.
But does the Minister not agree that one of the important pieces of unfinished business is the largely taxpayer-owned £1.5 billion bonus pool in RBS? As the board of directors publicly defied the Government over that matter, do the Government propose to take any further action, either by replacing those directors or by giving them fresh instructions about how to deal with that bonus pool?
RBS is a bank in which we exercise a certain degree of influence over remuneration policies—but the hon. Gentleman will be pleased to hear that its management have not yet made proposals for a bonus pool.
If my right hon. Friend undertakes the research that my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) suggested, will he look back to 1979 and see how pay levels have changed since then? Will he look in particular at how the take-home incomes of the richest have been affected by the massive tax cuts for the rich that the Tories introduced at the time?
Of course.