Vince Cable threatens banks over bonuses
Banks will be punished with higher taxes if they award huge bonuses in the next few months, Liberal Democrat ministers warned yesterday.
Today Vince Cable, the Business Secretary, will float the idea of giving shareholders more power to curb excessive pay packages for all company bosses.
In his speech to the Liverpool conference, he will announce that a review of executive pay and takeovers will be launched next month. It could result in legislation aimed at forcing company boards to behave more responsibly and “advisory votes” by shareholders on remuneration packages to put pressure on firms to show restraint.
The Coalition Government has already announced a levy on banks' balance sheets from January, which will eventually raise £2.5bn a year.
Yesterday's sabre-rattling suggests that the Coalition may extend the one-off 50% tax on bank bonuses of more than £25,000 announced by the previous government last December. That would cause anguish in the City of London, and provoke renewed warnings of an exodus of firms.
Before leaving the Liberal Democrat conference to attend a United Nations poverty summit in New York, Nick Clegg said ministers would not stand “idly by” if banks handed out “unjustified” bonuses.
The Deputy Prime Minister said: “I think it would be not in their interests at all, socially or economically, for them to award themselves [big bonuses].”