Banking

Huw Irranca-Davies Excerpts

Wednesday 15th January 2014 Commons Chamber

[Chris Leslie]

I will give way to my hon. Friend in a moment, but I want to finish this point.

The Prime Minister gave the clear impression at Prime Minister’s Question Time that he would veto higher pay and bonuses. Perhaps he was unintentionally misleading in the way that he made that point. He might want to come back to correct the record. Some of us think that he was conveniently looking at the total remuneration at RBS as a device to slip out of the question about how he will exercise the shareholder vote.

The House needs to know that RBS has reduced the number of bankers on its roll by about 2,000 in the past year. One would therefore expect its pay bill to fall, and so it should, but that does not get it out of answering the question about the individual senior bankers who are earning £400,000 or more. Will the shareholder, in this case the Chancellor of the Exchequer, give them permission not just to have bonuses of 100% of their salaries, but to bust through that and go to 200% of their salaries? That is a crucial test for the Chancellor. Whatever the sophistry and warm words we might get from the Prime Minister, they cannot wriggle out of confronting that decision.

[Huw Irranca-Davies (Ogmore) (Lab)]

Does my hon. Friend agree that this is a question of leadership? If leadership is not shown by the banking sector itself, it is for this House and this Government to show leadership. My constituents cannot understand why these people live in a stratosphere in which they are under no moral or financial obligation to behave properly. Let us show some leadership on this matter in today’s vote.

[Chris Leslie]

My hon. Friend is right. The motion states explicitly that the Chancellor should exercise his role as the majority shareholder to prevent an extreme approach to bonuses.

--- Later in debate ---

[Sajid Javid]

Again, my hon. Friend makes an excellent point.

[Huw Irranca-Davies]

The Minister is understandably making a case for the financial sector, as he also should for manufacturing and all other sectors. What my constituents fail to understand is why, when public and private sector employees over the last few years and now have accepted pay restraint and real-terms squeezes on their earnings, and we in this House, including Ministers, are facing public demands to accept pay restraint on our pay and conditions as well, top bankers are immune from those constraints.

[Sajid Javid]

I will come on to that topic shortly and share with the hon. Gentleman some numbers that show what has happened to the pay of top bankers.