The Government will come under fresh pressure today to end Britain's "bonus culture" despite a climbdown by Network Rail bosses over plans for them to land huge salary top-ups.
In a Commons debate, Labour will shift its target back to the banks, arguing that privately-owned companies like Barclays must show restraint because they were indirectly backed by taxpayers during the 2008 financial crisis. Barclays is due to announce its annual bonuses on Friday. Although there is speculation that it could cut them by about 30 per cent, Bob Diamond, the chief executive, could still be entitled to a multi-million pound payment.
Chuka Umunna, the shadow Business Secretary, will tell MPs today that the culture of excessive bonuses has damaged the economy, society and business. He is expected to say: "Very large bonuses should only be paid to reflect genuine exceptional performance if trust in the system is to be maintained."
Yesterday, six directors at Network Rail bowed to the outcry over plans for their new bonus scheme by waiving their right to top-up payments this year.
They could have been worth 60 per cent of their salary, with a further 500 per cent at the end of each five-year period.
Sir David Higgins, the chief executive, who is paid a basic salary of £560,000, said: "Even if this situation does arise this year, my directors and I decided last week that we would forego any entitlement and instead allocate the money to the safety improvement fund for level crossings."
Justine Greening, the Transport Secretary, will propose changes to corporate governance at Network Rail in a strategy document on the rail industry in the next few weeks. However, she is unlikely to say that the Government should be able to veto pay and bonus levels at the company.
Yesterday, David Cameron reassured business leaders at a private meeting that the Government does not have an "anti-business agenda" despite the controversy over bonuses. He stressed that wealth creation should be properly rewarded when he chaired a meeting of his Business Advisory Group in Downing Street. The regular session took place amid mounting concern in the business world that "banker bashing" and "bonus bashing" by politicians is damaging Britain's reputation.
There is anxiety among business leaders that the Coalition Government and Labour put pressure on Stephen Hester, the chief executive of Royal Bank of Scotland, to waive his bonus of almost £1m, and backed calls for Fred Goodwin, the former RBS boss, to lose his knighthood.Reuse content