Leaders clash over banker bonuses

David Cameron and Ed Miliband have clashed in the Commons over the incendiary issue of City bonuses, as the Labour leader said banks should be forced to disclose how many executives earn more than £1m.

The Prime Minister accused Mr Miliband of “hypocrisy” as they traded blows in the wake of the row over Royal Bank of Scotland chief executive Stephen Hester’s bonus and the bank’s former boss, Fred Goodwin, being stripped of his knighthood.

In a bitter row during Prime Minister’s Questions, the Labour leader urged the Government to implement legislation forcing banks to disclose how many employees were paid more than £1m.

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He said Chancellor George Osborne had even advocated naming the bankers concerned before the Tories entered government.

But Mr Cameron rejected his call, saying it had always been intended the reform would only ever be done at the same time as the rest of the European Union.

He also rejected Labour’s call for ordinary workers to be allowed to sit on remuneration committees, insisting it was not “practical” and broke “an important principle of not having people on a remuneration committee who have their own pay determined”.

Turning the tables on Mr Miliband, he said it was the last Labour administration that agreed an RBS bonus pool of £1.3bn, giving million-pound bonuses to “literally hundreds of people”.

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“The issue for you is, why are you in favour now in opposition of things you never did in government?” Mr Cameron asked. “Some might call it opposition – some might call it hypocrisy.”

But Mr Miliband said the Prime Minister was giving “no leadership on top pay” and said the failure to give force to the legislation on bonuses was “another broken promise”. He told Mr Cameron that hypocrisy was “saying you are going to stop a £1m bonus to Stephen Hester and then nodding it through”.

“When it comes to top pay, this Government and this Prime Minister are part of the problem, not part of the solution,” the Doncaster North MP said.

Mr Hester this week waived his near-£1m share bonus after a public row over the payment.

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On Tuesday night his predecessor Fred Goodwin was stripped of his knighthood – a move backed by Mr Cameron and Mr Miliband.

But former chancellor Alistair Darling yesterday criticised the “tawdry” treatment of Mr Goodwin and some Tory MPs expressed concern about the extent of political influence on the City.

Mr Darling voiced distaste at the way Mr Goodwin had been singled out by the Government, while other senior figures escaped punishment.

“There is something tawdry about the Government directing its fire at Fred Goodwin alone,” he wrote. “If it’s right to annul his knighthood, what about the honours of others who were involved in RBS and HBoS?”

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Mr Goodwin received his knighthood for services to banking under the Labour government, before guiding RBS to the brink of collapse in 2008.

Honours are usually only removed from individuals who have been convicted and jailed.

But the Cabinet Office – now led by former Sheffield Council chief executive Sir Bob Kerslake – said the scale of the RBS disaster had made the case exceptional.

“It was recognised that widespread concern about Fred Goodwin’s decisions meant the retention of a knighthood for ‘services to banking’ could not be sustained,” the Cabinet Office said.

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Pressed over whether the Prime Minister had applied political pressure to have the knighthood reconsidered, Mr Cameron’s official spokesman said it was the decision of civil servants on the Forfeiture Committee.

“It was their decision and their decision alone,” he said.