PRIME Minister Gordon Brown has weighed into the row over bonuses for senior staff at Royal Bank of Scotland.
The Prime Minister said any bonus payments to RBS staff must reflect the conditions in the economy and the performance of the bank.
He spoke after reports that RBS, which is being propped up with £20bn of public money, is preparing to make pay-outs to thousands of the firm’s senior staff.
RBS’s investment banking division paid £1.83bn in salary during 2007 – mostly in bonuses. Newspaper reports said bonuses for last year would also be paid, although the sums would be smaller.
Mr Brown said the top RBS executives had already left without severance pay while there were no bonuses being paid to board members and no dividends to shareholders.
He said he agreed with US president Barack Obama that a new approach was needed to reward senior banking executives.
He said: “Of course, we will bring forward further proposals as necessary. We expect whatever decisions are taken to reflect the conditions of the economy and the performance of the banks. There are no rewards for failure in what we are proposing.”
President Obama has proposed a 500,000 dollar cap on payments to American bank executives who participated in the US bailout.
A Downing Street spokesman said the Government would only support any bonus payments to RBS staff through UK Financial Investments if they were consistent with the taxpayers’ interest.
The spokesman said: “As the majority shareholder in RBS, UK Financial Investments is in discussions about possible approaches to remuneration.
“Any proposal would only be supported by UK Financial Investment if it is consistent with the taxpayers’ interest.”