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Banks: Pay

Volume 507: debated on Monday 15 March 2010

To ask the Chancellor of the Exchequer if he will bring forward proposals to place a cap on bankers’ bonuses. (321385)

[holding answer 9 March 2010]: The Government are clear that remuneration policies must be based on long-term sustainable performance in the interests of all shareholders, taking proper account of risk. Therefore, there must be an end to the short-term bonus culture in the banking sector.

However, the Government also recognise that performance related pay is an important part of rewarding valuable contributions as long as it rewards long-term success and takes an appropriate account of risk. The idea of a bonus cap was rejected by the G20 and the Government do not plan to bring forward proposals to place a cap on banking bonuses.