January 10, 2011 / 4:32 PM / 9 years ago

Government will not limit banks' bonus pools - spokesman

LONDON (Reuters) - The government will not set limits on the total amount of bonuses banks can pay their staff this year, a spokesman for Prime Minister David Cameron said on Monday.

The Conservative-Liberal Democrat coalition government has come under pressure to curtail big bonus payments at banks which needed significant state support during the financial crisis, such as RBS and Lloyds Banking Group.

UK Financial Investments, a government body set up to represent taxpayers’ interests in banks, is in discussions with RBS and Lloyds over bonus payments, Cameron’s spokesman said.

“We’ve made a broad statement which is about the need to see some restraint and some responsibility from the banks, but we are not going to set bonus pools for individual banks,” the spokesman told reporters.

Earlier on Monday, the opposition Labour party called for the reintroduction of a one-off tax on bonuses which raised about 3.5 billion pounds ($5.44 billion) for the Treasury last year and said not enough was being done to clamp down on excessive behaviour in the banking sector.

The coalition government has replaced that bonus tax with a levy on balance sheets which is estimated to yield about 2.5 billion pounds a year.

“We will set policy to achieve the maximum sustainable revenues from that sector,” Cameron’s spokesman said.

Reporting by Matt Falloon

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