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Bank Bonuses

Volume 522: debated on Wednesday 26 January 2011

8. What discussions he has had with ministerial colleagues on the level of employee bonuses to be paid by banks based in Scotland. (35131)

12. What discussions he has had with ministerial colleagues on the level of employee bonuses to be paid by banks based in Scotland. (35135)

With permission, Mr Speaker, I will answer Questions 8 and 12 together. I have regular discussions with ministerial colleagues on a range of issues. As the predominant shareholder in RBS, the Government expect the bank to be a back-marker and not a market leader on bonuses. People across the country are having to make adjustments as we come out of recession and repair our public finances. Everyone expects bankers to be part of this process.

Given that the Financial Services Authority report found that 1.1 million customer complaints were made against RBS in one year and that more than 50% were shown to have been dealt with inappropriately, does the Minister think it appropriate for RBS executives to receive lavish bonuses this year, and if not, what is he going to do about it?

As we have made clear, we have inherited an arrangement with RBS that was put in place by the last Government—the hon. Gentleman’s Government, not this one—to pay bonuses at market rates this year. We want to see bonuses lower this year than last year. That is absolutely clear-cut. As far as customer service is concerned, the hon. Gentleman makes an important point, and I am sure that RBS managers will have heard it.

With the collapse of the Bank of Scotland and the Royal Bank of Scotland, does the Minister agree that an independent Scotland would be as successful as Ireland and Iceland at the moment?