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Financial Institutions: Pay

Volume 715: debated on Monday 7 December 2009

Question

Asked by

To ask Her Majesty's Government what is their response to recent suggestions that those employed in the financial sector should be paid more than those in other sectors. [HL264]

In general, private sector remuneration arrangements are a matter for employers, employees and shareholders to agree. However the Government do have a role to play in preventing undesirable practices, such as remuneration policies in the banking sector which encourage excessive risk taking.

On 19 November the Government introduced the Financial Services Bill to Parliament. The Bill contains measures to implement both the G20 agreement on remuneration in the financial services sector and Sir David Walker's proposals to improve corporate governance. The measures in the Bill will help to ensure that remuneration policies do not contribute to excessive risk taking.