UK banks to go ahead with massive payouts
08 Jan 2011
According to the UK's banking circles, any pledges by the industry towards reducing its bonus payouts were likely to be 'more spin that substance'.
BBC's business editor Robert Peston said rgat he had been informed by an unnamed source that the best the government could hope for was a declaration from banks that payouts would have been even more if it hadn't been for ministerial intervention. According to analysts, that would be conveniently hard to disprove.
They say that this amounts to someone saying publicly what has all along be been privately suspected. But this could be quite embarrassing for the government to handle, as one of the important points in the coalition agreement was a call for 'robust action' to tackle 'unacceptable' bank bonuses, they add.
Meanwhile with the bonus season around, banks are expected to pay out around £7 billion in bonuses making it seem that the government's call for restraint is falling on deaf ears.
What could be hard to explain, at a time when VAT is up 20 per cent and public spending going down, is the £1 billion bonus pot at RBS – the bank which was such a basket case that it had to rescued by hard-pressed British taxpayers not long ago. The bank is still 80 per cent state-owned.
But analysts say bankers, scoffing at the government's austerity calls, should hardly be surprising since they are neither known for selflessness nor any inclination to pass over an opportunity to help themselves to entitled goodies. And that trait they may share with the others, considering how few professionals would act otherwise, and forgo their entitlements voluntarily at the instance of David Cameron.
