The Government have taken decisive action to tackle unacceptable bank bonuses. The Financial Services Authority has revised its remuneration code and new rules will be in place by 1 January 2011. In addition, the Government have introduced a levy that incentivises less risky banking activities, and we will continue to investigate the cost and benefits of a financial activities tax. In combination, those and other measures will ensure that remuneration is consistent with effective risk management.
The Minister will be aware that the Business Secretary has said that a big argument is going on in Government about the banks. He says that he wants a very tough approach but
“our Conservative friends don’t want to do that”.
Is the Business Secretary right?
May I remind the House that no hospital PFI contract was signed under the—[Interruption.]
While the Minister reviews the undoubtedly well-stuffed stockings of certain bankers to determine whether they have been naughty or nice, will he acknowledge the significant amount of tax that they pay, and the institutions that choose London as their domain? Will he recognise that, as far as their choice of domain is concerned, the airports of this country will not always be closed?
My hon. Friend makes an important point. At the time of the spending review the Chancellor made it very clear that we want banks to pay the maximum sustainable tax. That is why on 1 January we will introduce a bank levy, which the Opposition rejected when they were in government. That levy will raise £2.5 billion more than the net amount raised by their bonus tax.
Will the Minister now admit that the more noise the Government make about this issue, the less action they appear willing to take? Will he confirm today that amidst all the PR and bluster, the Chancellor has decided not to go ahead with Labour’s requirement that all bankers’ bonuses over £1 million be published? He may be willing to ignore the Business Secretary’s nuclear option, but the millions of Britons who are paying the real price of his austerity measures will never forgive him if he lets his friends in the banks off scot-free.
I am not going to be lectured by the hon. Lady about attitudes towards banks. Labour is the party that gave Fred Goodwin his knighthood, so I will not take any lessons from Labour politicians. They talk tough, but they did nothing when they were in government. This Government are taking real concrete measures to tackle bankers’ pay and to introduce the bank levy, which they refused to introduce. In Europe there will be a most stringent application of the Financial Stability Board principles on bankers’ remuneration.