Call for caps on bonuses at state banks

The Liberal Democrat for Leeds North West, Greg Mulholland, has drafted the early day motion along with a group of his party’s backbenchers amid calls for action to control executive pay in state-owned banks.

The motion praises the Government on reducing bankers’ bonuses from £11.6bn in 2008 to £1.6bn in 2013, and also welcomes the measures introduced by the Secretary of State for Business, Innovation and Skills, Vince Cable, which allow shareholders to determine executive pay and bonuses.

Mr Mulholland, who is the convenor of the Liberal Democrat Backbench Group in Parliament, said: “We now need to have clear and sensible limits for pay and bonuses in all state owned banks and a complete ban on any bonuses or pay rises for executives for state owned banks that have made a loss.”

The motion supports a cap on bonuses and an overall cap on executive remuneration to prevent salaries being increased to compensate for lower bonuses.

It also calls for a ban on bonus payments or increases in salaries for executives in banks wholly or partially-owned by the state during the period where the financial institution has recorded a loss.

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