Claims of greed sparked by new round of RBS bonuses

UK Political Editor

Wednesday 30 January 2013

TAXPAYERS are to once again pay the price for "greed" at the top of the Royal Bank of Scotland, it has been claimed.

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MICHAEL SETTLE UK POLITICAL EDITOR

Furious union chiefs hit out after it emerged investment bankers at the publicly owned Edinburgh institution are due to receive bonuses next month of up to £250 million.

Critics say that, not only will taxpayers be paying for the "bumper" bankers' bonuses, but also for the £500m fine expected to be incurred by RBS – 82% owned by the state – in relation to the Libor rate-fixing scandal.

Last night, Labour called again for the UK Government to repeat the tax on bank bonuses to help fund jobs for young people. George Osborne is said to accept the need to pay bonuses at RBS to keep the bank competitive. However, when the total payout figure is confirmed next month, the Chancellor can expect a public and political backlash. Cash bonuses are due to be limited to £2000, with the rest paid out in shares. Labour's Pat McFadden, who sits on the Commons Treasury Committee, warned there would be "enormous anger if UK taxpayers pick up the tab for the individual sins of traders who were trying to rig Libor rates". Dominic Hook, of the union Unite, said: "Once again, it looks like ordinary bank workers and taxpayers will pay the price for the greed at the top of RBS. "It is time George Osborne put his foot down. This is no way to repay the country's patience." He stressed that the RBS division implicated in the Libor scandal was set to reap huge financial rewards while innocent bank workers in call centres and branches were facing having their jobs cut, pensions slashed and terms and conditions eroded. He said: "Unite has written to the chairman of UK Financial Investments to call for an urgent meeting to discuss how it can be more proactive in the interests of staff and the taxpayer. UK Financial Investments was set up by the Government to handle its shareholding in banks. Chris Leslie, the Shadow Treasury Minister, noted: "While our economy is shrinking and the Government cuts tax credits for working families it looks set to be another bumper bonus round for bankers. "There should be fair rewards for performance but these bonuses follow the Libor fixing and mis-selling scandals that have been exposed." "There is now a clear case to repeat Labour's tax on bank bonuses this year to fund a guaranteed job for young people out of work. "Unless George Osborne sees sense, his tax cut for millionaires will mean thousands of bankers have an even more lucrative bonus round next year." The largest part of the fine RBS is expected to pay will go to US authorities, some £400m, with the rest, £100m, going to the Financial Services Authority. However, the bank is hoping it will be able to recoup up to £150m of the Libor fine from its bonus pool with a clawback of deferred payouts from previous years. John Hourican, RBS's head of investment banking, who is understood to have had no direct involvement in the Libor scandal, is expected to leave the bank soon. Reports have suggested he could receive a bonus of up to £4m.

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Claims of greed sparked by new round of RBS bonuses

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