Oral Answers to Questions

Debate between Andrea Leadsom and Julian Brazier

Tuesday 29th April 2014 Commons Chamber

[Andrea Leadsom]

RBS has made a good start on its return to growth under Ross McEwan. It now has a good strategy to be the best small and medium-sized enterprise bank in Britain, but it still has a very long way to go. Therefore, we felt, and United Kingdom Financial Investments Ltd agreed, that the right thing to do was to not allow RBS to do what other private sector banks have done, which is to go for the maximum of 2:1 in terms of bonus to salary. Lloyds, on the other hand, is much further along the road to recover, so it was fine to allow it, in line with other private banks, to go ahead with that 2:1 plan.

[Mr Julian Brazier (Canterbury) (Con)]

May I say how good it is to see my hon. Friend in her new position? I welcome her answer. Does she agree that the best way to tackle widespread concern about excessive bonuses is through opening the banks up to proper shareholder inspection and answerability, as we are gradually doing?

[Andrea Leadsom]

Yes, my hon. Friend is absolutely right. One of the priorities of this Government has been to ensure proper scrutiny of directors’ pay and remuneration, so the changes in the Prudential Regulation Authority guidelines introduced last year, strengthening improvements made by the Labour Government, are designed to do just that—to put us at the forefront of scrutiny and transparency in pay for banking.