Osborne calls for a halt on bonuses
Published 26/10/2009 | 14:13
Shadow Chancellor George Osborne today called for bank cash bonuses to high-flying staff to be turned into credit for hard-pressed small businesses.
It would be “inexcusable” for banks to pay out big bonuses when there were so many businesses that needed that cash, he said.
His call comes amid growing anger over bonuses this year expected to run into billions of pounds in the City of London.
He said he was talking about “emergency measures this Christmas” and told GMTV: “Let's end the big cash bonuses. If there's spare cash at the bank it should be lent out to small businesses, medium businesses, to help people keep their jobs.
“This is still a credit crunch, and it would be inexcusable for banks to pay out big bonuses to their staff, when there are so many businesses that need that cash.”
He stressed he was not talking about “people at the cash tills”.
“What I am talking about are the big cash bonuses in the investment banking arms, in some of the retail banking arms.
“That cash, if it's available, should be lent out to small businesses watching this programme, and for the people who work in companies who are lacking credit at the moment, because we've got to keep people in work.”
Chief Secretary to the Treasury Liam Byrne has already accused Mr Osborne of “hypocrisy” and playing politics with the recession over the idea, which he is due to outline later today.
Mr Byrne said: “Mr Osborne's hypocrisy beggars belief. The Tories have fought against every plan we've delivered to support jobs and businesses. And if we withdraw support now as Mr Osborne wants the recession will be longer and deeper.
“We have already introduced the toughest bank remuneration policy in the world. We have stopped short of banning all bonuses for retail banks because it is unworkable but we are presently negotiating with RBS and Lloyds on the payment of 2009 bonuses.”
Mr Osborne rejected Government claims of hypocrisy as “nonsense”, saying: “We've been setting out plans to get Britain working, to help 400,000 people with training places, help the unemployed back to work. Above all we need to keep businesses afloat.”
He is expected to tell an audience in London's Docklands later that cash, instead of being spent on bonuses, should be put on to banks' balance sheets to support new lending to businesses and bolster growth in the wider economy.