Leaders trade blows on City bonuses

David Cameron and Ed Miliband traded accusations over City bonuses as the Labour leader called for banks to be forced to disclose how many executives earn more than ?1 million.

The Prime Minister accused Mr Miliband of "hypocrisy" as they clashed in the wake of the row over Royal Bank of Scotland chief executive Stephen Hester's bonus and the bank's former boss, Fred Goodwin, being stripped of his knighthood.

In the Commons the Labour leader urged the Government to implement legislation, already on the statute book, requiring banks to disclose how many employees were paid more than ?1 million.

He said Chancellor George Osborne had even advocated naming the bankers concerned before the Tories entered government.

But Mr Cameron rejected his call, saying the reforms author Sir David Walker had recommended it should be done at the same time as the rest of the European Union.

He also rejected Labour's call for ordinary workers to be allowed to sit on remuneration committees, insisting it was not "practical" and broke "an important principle of not having people on a remuneration committee who have their own pay determined".

Turning the tables on Mr Miliband, he said it was the last Labour administration that agreed an RBS bonus pool of ?1.3 billion, giving million-pound bonuses to "literally hundreds of people".

"The issue for you is, why are you in favour now in opposition of things you never did in government?" Mr Cameron said.

"Some might call it opposition, some people might call it hypocrisy."

But Mr Miliband said the Prime Minister was giving "no leadership on top pay" and said the failure to give force to the legislation on bonuses was "another broken promise".

He told Mr Cameron that hypocrisy was "saying you are going to stop a ?1 million bonus to Stephen Hester and then nodding it through".

"When it comes to top pay, this Government and this Prime Minister are part of the problem, not part of the solution," he said.

Mr Hester this week bowed to mounting public pressure and waived his near-?1 million share bonus after a public row over the payment.

On Tuesday night his predecessor Fred Goodwin, who led the bank to failure and part-nationalisation, was stripped of his knighthood - a move backed by Mr Cameron and Mr Miliband.

The award was "cancelled and annulled" by the Queen after a key committee found the ex-RBS boss had brought the honours system into disrepute.

But former chancellor Alistair Darling criticised the "tawdry" treatment of Mr Goodwin and some Tory MPs expressed concern about the extent of political influence on the City.

Mr Darling voiced distaste at the way Mr Goodwin had been singled out by the Government, while other senior figures escaped punishment.

Writing in The Times, Mr Darling, who as chancellor led negotiations over the RBS bailout, insisted: "There is something tawdry about the Government directing its fire at Fred Goodwin alone; if it's right to annul his knighthood, what about the honours of others who were involved in RBS and HBoS?"

Mr Goodwin received his knighthood for services to banking under the Labour government, before guiding RBS to the brink of collapse in 2008.

Honours are usually only removed from individuals who have been convicted and jailed.

But the Cabinet Office said the scale of the RBS disaster - necessitating a ?45 billion bailout from the taxpayer - made the case exceptional.

"In reaching this decision, it was recognised that widespread concern about Fred Goodwin's decisions meant that the retention of a knighthood for 'services to banking' could not be sustained," it said.

Pressed repeatedly over whether the Prime Minister had applied political pressure to have the knighthood reconsidered, Mr Cameron's official spokesman said it was the decision of civil servants on the Forfeiture Committee.

"It was their decision and their decision alone," he said.

Mr Cameron said in a statement: "The proper process has been followed and I think we've ended up with the right decision."

A spokesman for Liberal Democrat Deputy Prime Minister Nick Clegg said he also backed the move. Mr Osborne said it was "appropriate" that Mr Goodwin lost his knighthood.

Mr Miliband said: "It is right Fred Goodwin has lost his knighthood but it is only the start of the change we need to see.

"We need to change the bonus culture and we need to change the rules so we see real responsibility across the board."