Cameron warning in row over bankers' bonuses
Royal Bank of Scotland should not be "leading the way" on bankers' bonuses, David Cameron warned yesterday amid reports its chief executive was to receive a £6.8m pay package.
The Prime Minister said the bank, which is 83 per cent owned by the taxpayer, should be a "back-marker" when it came to payouts as he urged the financial sector to be "socially responsible".
But although he called for a reduction in the overall City bonus pot, he said he would resist pressure to "micro-manage" banks and cautioned against making them a "scapegoat".
The reported scale of RBS chief Stephen Hester's remuneration package – said to include a 2.5m cash-and-share bonus this year – was "pure speculation" he said and yet to be finally determined.
"Royal Bank of Scotland, as you rightly say, is owned by the Government. They should not be leading the way on bonuses, they should be a back-marker," he said.
However it was important that the banks could be sold to recoup the taxpayers' investment, he added, "and we won't do that if we micro-manage them on a daily basis according to whatever's in today's papers".
Mr Cameron said he understood the public's anger over bankers' bonuses. "I feel it because frankly the whole country has suffered from irresponsible lending practices, irresponsible behaviour.
"But we need to recognise though that there were a lot of people to blame for the mess we are in and that we shouldn't just think it's an easy scapegoat to pick one in view.
"Governments made mistakes, regulators made mistakes, politicians made mistakes, everyone was involved. Opposition made mistakes, dare I say it."
Sources at RBS described Mr Cameron's comments as "helpful" saying that bonuses had previously been paid out in shares spread over three years.
The British Bankers' Association said the industry understood the country's concerns and pointed out that the UK had a "tougher regime than any other country".