A row has erupted between Labour and the Tories following reports that the Royal Bank of Scotland (RBS) may ask the Government to approve a rise in the EU’s cap on bank bonuses. RBS can't just give bonuses to their staff without authorisation from the Chancellor as the bank is still eighty two percent owned by the taxpayer.
RBS say they haven't asked to do so but Labour say they want it blocked if they do saying it "cannot be right for George Osborne to approve the doubling of the bank bonus cap". Conservative MP Mark Garnier said bonuses were a "reward for enterprise" and he accused Labour of attempting to "destroy the one industry we have which is a net exporter of services". He accused Labour's Chris Leslie of "playing fast and loose with millions of people's jobs. You are playing fast and loose with the economy and it is just nonsense."
Shadow Chief Secretary to the Treasury, Chris Leslie, said: "It shouldn’t have taken the EU to act to rein in excessive bonuses, but there has been no action from the Chancellor here in Britain. As the majority shareholder, the government should reject any request from RBS to increase the cap."
This row come hours before the Labour party uses an opposition day motion in the Commons on banking. that criticises the Government and says "reforms have failed to deliver a competitive banking system which serves the interests of consumers or the needs of businesses and the British economy".
It also says Labour is "concerned that customers have limited choice and low levels of trust and confidence in the banking market". And expresses Labour's "disappointed that recent legislation has fallen short of the recommendations of the Independent Commission on Banking which called for action to diversify the sector and ensure that major new banking service providers are created."
A spokesman for the Conservative party responded to Labour's criticism of their record of regulation by saying: "Labour's failure to regulate the financial system led to the worst banking crash in our history, causing the worst recession in a century. So this is another problem Ed Miliband is talking about that was created by the Labour government he was at the heart of.
Continuing the Spokesman said: That's why part of David Cameron's long-term economic plan is about fixing our banking system - by increasing competition on the high street, ring fencing retail from investment banking so that no bank is too big to fail, and increasing lending to business. There is already greater choice on the high street now than there was under Labour. Our changes will mean a more secure banking system for businesses, hardworking people and their families."
