THE Tory-LibDem coalition has given the banks an assurance that they are at liberty to continue to pay unlimited bonuses, with no government regulation.
The bankers’ bonus pool is now expected to be £7 billion.
This bankers’ victory was reflected at the House of Commons Treasury Select Committee yesterday when Barclays Bank Chief Executive, Diamond, told the MPs: ‘There was a period of remorse and apology for banks and I think that period needs to be over.’
He further needled MPs by refusing to confirm whether or not he would be taking his £9 million bonus this year.
Diamond maintained: ‘I haven’t been offered a bonus, that’s a decision that will be taken by the remuneration committee in the next few weeks.’
When Labour MP John Mann asked whether he would be refusing his bonus, Diamond stared at him and paused for a moment, before replying: ‘You’re not a big fan of Barclays, are you?
‘I’ve not been awarded a bonus yet. I’ll make that decision with my family, as I did last year.’
Mann responded: ‘I’m a big fan of getting answers from you.’
Diamond received £21 million in pay and bonuses in 2007, but has waived his bonus for the last two years.
While he said he was grateful for the support given to the banking sector from central banks and governments, he claimed that Barclays had not taken any direct support from the taxpayer.
After the committee meeting, Labour MP Mann pointed out that Barclays had received 48 billion dollars from the US taxpayer via the United States Federal Reserve in September 2008.
At the committee meeting Diamond had grandly declared ‘No bank should be a burden on the taxpayer.’
Later, Mann said: ‘It’s obscene these bankers continuing to pay themselves these extraordinary bonuses.
‘The only decent thing for him to do in the current economic climate is not to take the bonus this year.’
Diamond also claimed that Barclays Bank doesn’t evade taxes, but he agreed that he would examine the number of off-shore operations it has.
‘Barclays is not evading taxes,’ Diamond claimed.
‘We are complying with the spirit and the letter of the law.’
He said this in answer to questioning from Labour MP Chuka Umunna, who suggested that the bank had more than 300 companies operating in the Cayman Islands, the Channel Islands and other ‘known tax havens’.
Barclays paid two billion pounds in UK tax last year, said Diamond.
He said he would write to the committee later to show what percentage of that payment was payroll tax.
‘There was a period of remorse and apology for banks and I think that period needs to be over,’ said Diamond.
‘We need our banks willing to take risks . . . so we can create jobs.’
It is reported that Stephen Hester, CEO of the 86 per cent state-owned Royal Bank of Scotland is set for a 2.5 million pound bonus.
Diamond said the major banks were in discussions with the government about lending targets for next year.
‘Lending is what we do. We like to lend,’ he said overruling committee complaints that the banks were not lending enough to support business.