Labour seek to eradicate City bonus culture

THE ROW surrounding City bonus payouts intensified today as Labour stepped up its attack on a culture which it claims is damaging the economy and wider society.

The party is using an opposition day debate in the Commons to call for large bonuses in banks bailed out by the taxpayer to be paid only when they reflect “genuinely exceptional performance”.

Labour strategists are keen to continue to make the political running after Royal Bank of Scotland chief executive Stephen Hester waived his bonus of almost £1 million following a threat by Ed Miliband to put it to a Commons vote.

Yesterday six senior executives at taxpayer-subsidised Network Rail followed suit and agreed to forgo their bonuses in the face of a political storm over the scale of the planned awards running into hundreds of thousands of pounds.

Chief executive Sir David Higgins, who was among those in line for the payouts, announced the money will instead be paid into a safety improvement fund for railway level crossings.

Shadow business secretary Chuka Umunna will use his Commons speech to demand a halt to what he calls the “culture of excessive bonuses” and for greater responsibility in the City and beyond.

He will argue that such lavish payouts have damaged Britain’s economy and its society, as well as being bad for business.

Labour believes that it has captured the public mood, amid popular revulsion at the perceived excesses of the City at a time of economic austerity.

But with feelings running high, the party has also faced criticism that it is stoking anti-business sentiment which risks driving banks and other financial institutions overseas.