Extend tax on bankers' bonuses, Miliband urges

Bankers found themselves back in the firing line as Mr Miliband said Ministers should "take action" over RBS chief executive Stephen Hester, who is reportedly in line to receive a 2.5m bonus despite its bail-out by taxpayers during the economic crisis.

In a joint Press conference with Shadow Chancellor Alan Johnson, whom he backed following further criticism after a weekend gaffe when he appeared not to know key National Insurance figures, Mr Miliband claimed the coalition was not living up to its pledge to clamp down on bonuses.

He said the Government should extend the one-off tax on bankers' bonuses for another year, saying it had raised 3.5bn last year. He claimed the Government's proposed bank levy would raise just 1.25bn this year.

"It is unfair and it is the wrong economic judgment to be cutting taxes for the banks at a time when everybody else is paying more," said Mr Miliband, the MP for Doncaster North.

"We believe the extension of the bonus tax for another year is not only fairer, but more responsible. This is because we would use the money raised to support economic growth."

Deputy Prime Minister Nick Clegg said bank bosses should show "extra sensitivity and transparency" in their rewards, and insisted the bank levy would raise 2.5bn a year by the end of the Parliament. Coalition sources also rejected Mr Miliband's claim that the bonus tax had raised 3.5bn last year.

Mr Miliband also urged the Government to rethink its decision to scrap the Future Jobs Fund, which created fixed-term jobs for thousands of unemployed young people. The Yorkshire Post revealed last week how the Government had pulled the plug on 600 jobs in the region when the scheme was scrapped.

He also reiterated his denial that the UK's massive deficit was caused by overspending by Labour.