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Miliband denies banker 'witch hunt'

Labour leader Ed Miliband has denied he is whipping up a "witch hunt" against bankers as he called for a tax on bonuses and new rules to rein in top pay.

The president of the Confederation of British Industry (CBI) warned that the "vilification" of bankers such as Royal Bank of Scotland chief executive Stephen Hester over bonuses risks damaging Britain's interests.

Following Mr Hester's decision to waive a £963,000 bonus, David Cameron has urged other executives at the largely state-owned bank to show restraint when they are offered large payments in the coming weeks.

But Mr Miliband said the Prime Minister was "totally behind the curve of public opinion" on the need for action to change the bonus culture. Labour will use a parliamentary debate next Tuesday to call for a tax on bankers' bonuses, he said.

"I think the whole culture has got to change," Mr Miliband told Sky News. "We need restraint right across the board in our banking industry and I think business and Government should lead that change. Change the rules and, as a temporary measure, tax those bankers' bonuses so the taxpayer can get something back from what I think is still a bonus merry-go-round."

CBI president Sir Roger Carr warned that "populist" attacks on City "fat cats" risked driving talented people and investment away from the UK. Mr Hester took on a massive task in the public interest when he took the helm of RBS after the bank was bailed out by the government in 2008, said Sir Roger in an article in The Times.

"The chances of enticing others to take on difficult tasks of national importance have undoubtedly been jeopardised," wrote the CBI chief. "Not by the remuneration he didn't receive but for the vilification he did. This cannot be in the long-term public interest."

Negativity over top pay risks damaging the business environment, warned Sir Roger. "If corporate Britain is to thrive and attract the most talented people in our society, politicians must make it clear that business is valued and respected for the standards it sets as well as the wealth it creates," he said.

Mr Miliband said he disagreed with Sir Roger. "It is definitely not a witch hunt," said the Labour leader. "Take the case of RBS. We have figures on small business lending which say RBS is not meeting its targets; we have a lot of evidence that bonuses are being paid out not for exceptional performance - as they should be - but for people doing their job."

Mr Cameron said on Monday night the "main thing" was to ensure that RBS was turned around to safeguard taxpayers' investment. "I think what needs to happen is a sense of restraint, which is exactly what the Government urged on RBS in the first place, and they need to do a better job - as everybody has - about explaining how pay is linked to performance," he told a press conference in Brussels.


From Belfast Telegraph