To ask Her Majesty's Government further to the answer by Lord Myners on 10 February (Official Report, House of Lords, cols. 1009–11), whether they have identified any instances where legal and contractual obligations to pay bonuses can be challenged; and, if so, in how many cases. [HL1479]

UKFI will continue closely to scrutinise the remuneration proposals of banks participating in the government recapitalisation scheme. As announced in its press release on 17 February, RBS has agreed to minimise the bonuses paid in 2009 for performance in 2008 while having regard to its legal obligations. Lloyds Banking Group has also committed to a restructuring based on the same principles as the RBS settlement.

UKFI has agreed with the banks in which the Government have investments that they will assure themselves that all payouts to former directors were no more than legally necessary.

To ask Her Majesty's Government further to the answer by Lord Myners on 10 February (Official Report, House of Lords, cols. 1009–11), whether he has instructed the direction of UK Financial Interests Limited to take account of the views he expressed regarding bonuses being fully justified by the contribution of the individual. [HL1481]

UK Financial Investments (UKFI) has been set up to manage the Treasury's shareholdings in recapitalised banks. UKFI has a role in scrutinising the non-lending recapitalisation conditions, including on remuneration policy, to protect the interest of the taxpayer as a shareholder.

UKFI has been liaising with the board of the banks of which they are major shareholders on remuneration policy, including work to ensure that remuneration policies are in line with the Government's principles on remuneration, including no rewards for failure.