PM is protecting banker bonuses, claim Lib Dems

The Liberal Democrats are making a final attempt to persuade David Cameron to rein in bankers' bonuses amid growing public anger over the imminent payout estimated at £7bn.

Liberal Democrat MPs believe that Mr Cameron, rather than the Chancellor, George Osborne, has emerged as the main obstacle to tough action against the bankers. They are furious that Downing Street signalled a climbdown this week while talks continued with the big banks on a new settlement covering bonuses and lending to small businesses and first-time buyers.

"You don't wave the white flag in the middle of tough negotiations," Baron Oakeshott of Seagrove Bay, a Liberal Democrat Treasury spokesman, told The Independent yesterday. "This is the moment of truth on fairness for our Coalition. We can't allow a bonus bonanza in the age of austerity."

Lord Oakeshott, a former City fund manager, said the Government must stick to the agreement made when the Conservatives and Liberal Democrats joined forces last May. Its opening section says: "We will bring forward detailed proposals for robust action to tackle unacceptable bonuses in the financial sector." The Liberal Democrat peer said: "Nick Clegg and Vince Cable are putting up a terrific fight for the Coalition Agreement. It is a package deal, not a pick-and-mix of the policies you fancy."

The Government's efforts to reach a voluntary deal with banks suffered a setback last night when it emerged Santander is to pull out of negotiations. The Liberal Democrats want the Government to use all the weapons at its disposal – especially on the Royal Bank of Scotland and the Lloyds Banking Group, in which taxpayers have a stake.

Ministers have criticised the previous government for not ensuring that this year's bonuses were curbed. But Lord Oakeshott insisted: "Just because Labour cocked up the contract for Stephen Hester [the RBS chief executive], it does not mean we have to sign the cheque. The taxpayers are paying 83p of every pound that he collects."

He added: "The public-sector banks are failing the public. RBS and Lloyds have both missed their legally binding lending targets by a mile."

As well as a crackdown on bonuses, Lord Oakeshott is demanding tough disclosure rules for top earners in all banks. He wants names as well as salaries to be disclosed. "The current system makes a mockery of corporate governance because institutional shareholders do not know what the top earners are collecting," he said.

The salaries of everyone whom RBS and Lloyds paid more than £142,500 (the Prime Minister's salary) should be published in line with the rules for other public servants, he said.

Santander scuppers talks

Spanish bank Santander has pulled out of high-level talks between the banks and the government aimed at boosting commercial lending, restricting bonuses and releasing more details over pay deals.

The decision is a blow to hopes of an industry wide agreement across the entire banking industry, and the government's aim to secure a combined £200bn in commercial lending, including a £1bn contribution to David Cameron's "big society bank".

Standard Chartered left the negotiations, which are being led by Barclays, before Christmas. HSBC and the bailed-out Royal Bank of Scotland and Lloyds Banking Group are understood to be continuing their discussions and aiming to conclude talks by January 23rd.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
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 General

Recruitment Genius: Massage Therapist / Sports Therapist / Physio / Osteopath

£12000 - £24000 per annum: Recruitment Genius: An opportunity has arisen for o...

Recruitment Genius: Account Manager / Sales Executive - Contract Hire

£35000 - £60000 per annum: Recruitment Genius: This industry leader provides c...

Recruitment Genius: Project Coordinator

£28000 - £30000 per annum: Recruitment Genius: A Project Coordinator is requir...

Recruitment Genius: Area Sales Manager - Midlands

£20000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Day In a Page

John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water
Jessie Cave interview: The Harry Potter star has published a feminist collection of cartoons

Jessie Cave's feminist cartoons

The Harry Potter star tells Alice Jones how a one-night stand changed her life
Football Beyond Borders: Even the most distruptive pupils score at homework club

Education: Football Beyond Borders

Add football to an after-school homework club, and even the naughtiest boys can score
10 best barbecue books

Fire up the barbie: 10 best barbecue books

We've got Bibles to get you grilling and smoking like a true south American pro
Wimbledon 2015: Nick Bollettieri - Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power

Nick Bollettieri's Wimbledon Files

Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power
Ron Dennis exclusive: ‘This is one of the best McLaren teams ever – we are going to do it’

‘This is one of the best McLaren teams ever – we are going to do it’

Ron Dennis shrugs off a poor start to the season in an exclusive interview, and says the glory days will come back
Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most