Myners defends RBS after row over pay

City minister Paul Myners yesterday came out with a show for support for embattled Royal Bank of Scotland.

At a hearing of the Treasury Select Committee Mr Myners said that placing too many curbs on pay at the company could damage its ability to compete. "If we want RBS to compete in a global world... it has to equip itself appropriately to do that," he said.

"If we said to RBS that you can only pay your key employees up to the national average... or some other arbitrary figure, the effect would be a significant erosion in the competitiveness of the bank, the loss of its ability to (provide) credit, a loss of employment - particularly in Scotland - and a decline in the stature of the bank."

The minister's words follow several such warnings from RBS, which is 84 per cent owned by the state, itself. Chief executive Stephen Hester has railed against what he called the "politicisation" of the bank, although at a hearing of the same committee on Tuesday he backtracked and said he regretted his earlier words.

RBS has become the focus of the government's tough tactics pay. It has been forced to agree to slash cash payouts and handed the Treasury a veto on its 2009 pay policies as a consequence of its entry into the state-backed "asset protection" scheme. However, it has secured agreement from UK Financial Investments, the body overseeing the Government's interest in the banking sector, for this years pay plan.

RBS is 84 percent owned by the tax payer after the Government pumped billions of pounds in to stave off a possible collapse. Mr Hester was appointed to lead the recovery after his predecessor Sir Fred Goodwin, widely blamed for leading the company to near ruin, was fired.

Mr Hester has said that investors have expressed concerns over RBS's ability to hire and retain top performers and warned that staff who work at the bank have had to deal with the public opprobrium it has faced, although many of those responsible for its problems have been fired.

Mr Myners said imposing a tough bonus clampdown on RBS alone would do little to change global banking behaviour and would severely disadvantage the and the tax-payer's chances of getting a return on the billions invested into it: "The Royal Bank of Scotland cannot redefine the world alone," he said.

RBS has denied its board threatened to step down over the veto issue, but has said it took legal advice on issues related to it and their ability to function as directors as a result.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Guru Careers: Pricing Analyst

£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Sales Team Leader - Wakefield, West Yorkshire

£21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders