Oral Answers to Questions

Angela Smith Excerpts

Tuesday 29th April 2014 Commons Chamber

[Mr Osborne]

We need to have competitive energy prices while at the same time building a sustainable energy mix. The major £7 billion package in the Budget to help with the cost of energy for manufacturers has been welcomed not just by the big energy-intensive industries, but by many small business and, of course, families.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

2. What recent representations he has made to the European Union on the proposed cap on bank bonuses.

[The Economic Secretary to the Treasury (Andrea Leadsom)]

In September, the Government launched a legal challenge to the bonus cap provisions agreed under EU capital requirements directive 4. We feel that those rules were rushed through without any assessment of their impact and that they will undermine the progress we have made to try to align remuneration with risk by pushing bankers’ fixed pay up rather than down.

[Angela Smith]

The Chancellor has chosen to prevent the Royal Bank of Scotland from paying bonuses to employees that are worth more than double their salary, but he has not done the same with Lloyds. Will the Minister explain why what is good enough for RBS is not good enough for Lloyds?

[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.