Wokingham Times

I am relieved that Mr Hesker decided to waive his bonus at RBS. I have been unhappy for sometime about the remit the last government gave to RBS, and the remuneration offered to senior Directors to carry it out. I have been lobbying the Coalition government to change both the task set the Board, and the way we pay for it to be carried out.

I have no objections to successful Directors and executives in the private sector being well rewarded. That is a matter for their shareholders and for them. Government cannot get into the business of setting levels of pay throughout UK companies , especially as they have to compete in a global market where talented people and successful companies can take themselves elsewhere if government interferes too much. Government has enough to do, without trying to decide what is fair or reasonable for a Director to be paid.

I do have objections to a few employees in the public sector being paid much larger salaries and bonuses than most others in public service out of taxpayers’ money. I do not think it a good idea to pay large sums at RBS to senior people before they have delivered the profits and the dividends to shareholders that we would like. I am pushing for the government to require the RBS Board to split the RBS Group up , creating a range of new banks and financial service businesses out of the empire they preside over, and sell these on as quickly as possible to the private sector. So far the government and Board has come round to the view that they should sell off the Investment banking businesses, which is a welcome start.

I would reward the Directors at private sector levels for doing this, once they have succeeded. Their bonuses should be based on what they return to the private sector and how much money to get for it. I do not believe for one moment that even Mr Hester can get back all the taxpayers money poured into RBS. We are into damage limitation, into getting the most we can for it, into cutting taxpayers’ risks as quickly as possible. Ministers are not cut out to be bank shareholders. Taxpayers will not take kindly to more losses from the state owned banks. We need a stronger policy to get them off our payroll.

Part of the reason for my proposal is the knowledge that we need more banks, more banking competition, and more willingness by High Street banks to lend to small and medium sized enterprises and to solvent individuals. The current state of our nationalised banks is holding back recovery. That’s why the government needs to do more than breathe a sigh of relief about a £1 million bonus waived.

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2 Comments

  1. Posted February 1, 2012 at 3:56 pm | Permalink

    Now talking of rewards for failure.

    Will you be asking for Gordon Brown and Ed Balls’s pensions to be removed for the black hole in government finances?

    Will you be calling for Cameron to be stripped of his pay since the losses on the government accounts last year were 150 bn for the deficit, 350 bn for the pension.

    1/2 trillion in just one year?

    Rewards for failure? Yep, if you are a politician.

    Otherwise, its the lynch mob, with the pitchforks and flaming torches, calling for people’s heads on poles.

    [Unless your a politician]

    Take the Lords. Archer, Uddin, Clarke, Hanningfield, Taylor (Both of them).

    Criminal activities, selling legislation for cash. Michael Pownall made it a state secret what they Uddin and Clarke had done on the grounds it would bring the Lords into disrepute.

    Now we have had Fred made a Pleb, time for these individuals to be hung out to dry.

  2. Posted February 2, 2012 at 9:07 am | Permalink

    I wonder, are politicians pathologically unable to comment about anything at all without making some accusation regarding another party? Is it possible that instead of resorting to cheap shots, politicians might just say “here’s the way the world is – we can’t actually say what we might have done in power because we weren’t there (we weren’t good enough then to convince/fool the electorate and hence really we have no place here to comment constructively) – and he’s how we might change things”.

    Then I might start listening to politicians a little bit more. You spoil what in many places is perfectly sensible comment here John with an all-too-common and unnecessary childish rant about what the previous government did (or didn’t do).

    reply: I am very restrained about the last government in the light of their record.Most of my posts do not comment on Labour. Sometimes you do need to explain the history, so people remember why we face the current problems.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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