Banking (Responsibility and Reform)

Debate between Ben Gummer and Michael McCann

Tuesday 7th February 2012 Commons Chamber

[Mr McCann]

There must be responsibility across every business, whether it is private or public. I am not a communist—the hon. Gentleman will be delighted to know that. I do not suggest that we move to the Cuban model and are all paid the same for doing different jobs, as I recognise that people have different contributions to make and should be paid different salaries for doing so. Often, examples that go to the extreme, such as those about footballers, and that go into other systems of capitalism in the country in which they work do not take the debate much further forward. My analogy is between the civil service and the Royal Bank of Scotland, as the civil service is in the public sector as is the Royal Bank of Scotland, because we own the largest share in it. The difficulty we had in defining performance-related pay in the civil service reads across, it strikes me, to the difficulty we have in defining performance-related pay in the Royal Bank of Scotland.

[Ben Gummer (Ipswich) (Con)]

Will the hon. Gentleman give way?

[Mr McCann]

I think I have been generous enough in giving way, and other Members want to speak.

On bankers’ bonuses, it appears that when the behaviour being rewarded is non-productive—the Royal Bank of Scotland and other banks have not met their Merlin targets and, in each of the past 12 months, they have not met their targets for lending to SMEs—it is surely a case of the emperor’s new clothes. Bankers’ bonuses cannot be based on an opaque set of rules. They are a travesty, a charade and the practice should be outlawed not only in RBS but in other organisations that cannot properly define a performance-related pay system. The era of these unacceptable bankers’ bonuses must come to an end, as we need a direct relationship between reward and performance. Most importantly, the Royal Bank of Scotland has an economic duty to lend to small and medium-sized enterprises to ensure that the economy of our country starts to improve. On that note, I commend the motion and I will support it tonight.