STUC on RBS Bonuses

December 3rd 2009

Commenting on reports that the RBS Board has threatened to resign if the Government prevents it from paying bonuses, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:

“This is a tipping point in the Government’s relationship with the banks it owns on our behalf and now is the time for it to start exerting control to match the extent of its shareholding.

“The Chancellor must hold firm. As ordinary bank workers, who even with bonuses earn substantially less than the median wage, continue to carry the can for the crisis, the sense of entitlement that characterises executives and traders appears wholly undiminished.

“These bonuses are derived from the public rescue of the banks, quantitative easing and diminishing competition within the market. Bonuses are demonstrably not, as the recipients like to pretend, fair reward for skill and effort applied in a perfectly competitive market. Bonuses also tend to reflect the inadequate exercise of control and responsibility by the business owner.

“The public will note that the bonus recipients have suffered not at all for the crisis they caused; one that has wreaked mayhem in the real economy. If exceptional interventions were warranted to rescue the banks, the public will ask why an exceptional windfall tax on bonuses cannot be justified to help pay for them.

“As an absolute minimum, the Chancellor must insist on changes in the way bonuses are structured and paid in order to minimise risk taking and short-termism”.

ENDS

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