Chuka Umunna, Labour’s Parliamentary Candidate for Streatham, calls on the government to follow President Obama’s lead and curb bank bonuses.
Chuka Umunna, Labour’s Parliamentary Candidate for Streatham appeared on the panel of BBC Radio 4’s “Any Questions?” programme on Friday (6 February 2009) with former Director-General of the BBC, Greg Dyke, former BBC journalist, John Sergeant (also of “Strictly Come Dancing” fame) and Conservative MP, Ann Widdecombe.
Topics discussed by the panel included the recent snow conditions, the controversial comments made by TV personalities Carole Thatcher and Jeremy Clarkson, the recession, the trial of Binyam Mohamed and bank bonuses.
On Wednesday (4 February 2009) President Barack Obama announced that Wall Street bosses whose banks are being bailed out by the US taxpayer will not be able to earn more than $500,000 (£345,000) in cash a year. Any executive of a company accepting federal aid will be able to increase their pay beyond this through the award of shares, but they will not be able to cash these in until all taxpayer funds have been paid back.
In October 2008, the UK government imposed a ban on bonuses in banks in which the government has a stake (such as RBS) but this only applies to the boards of directors of the banks concerned and not to the high earning investment banking professional working within them. Umunna, who is also an employment law solicitor by profession, called on the government to go further on the programme. Umunna said President Obama’s measures were a “good idea” and further added:
“I am not opposed to bonuses per se where they reward people for success and for contributing to the economy; what I have an issue with is where you have rewards for failure and we have seen a lot of that in the last year or so.
“If you look at RBS, 80% of the workforce there are over-the-counter cashiers earning on average about £20,000 a year – now obviously those are not the target.
“The target will be the people working in the investment banking division; the people and the speculators who have engaged in the financial wizardry which has got us in the mess that we are. In terms of having a cap on their salaries, I am open to that idea.
“I am an employment lawyer by profession – I have acted for quite lot of bankers – and I can tell you there aren’t many job vacancies out there, so if you are going to do anything about these exorbitant salary packages then now is the time to do it.”
Other panel members concurred with Umunna’s comments.
John Sergent said:
“The least we can do is make sure that [the bankers] don’t benefit from this terrible, terrible period that they are now forcing us all into.”
“We will all suffer as a result of the failures of the financial sector.”
Ann Widdecombe MP said:
“I think it is axiomatic that if you are paying a bonus you are paying it for success. I just can’t see the logic of paying a bonus for failure.
“Where I do agree with Chuka is this – you aren’t in the usual competitive situation where they can say ‘right, fine, well we will just go off somewhere else’ because the whole banking sector at the moment is in its own crisis so they haven’t got that sort of leverage.”
A full transcript of the programme can be found here:
http://www.bbc.co.uk//radio4/news/anyquestions_transcripts_20090206.shtml
Left to right: Ann Widdecombe MP, John Sergeant, Jonathan Dimbleby, Anne Peacock (BBC producer), Greg Dyke and Chuka Umunna. Photo courtesy of the Kentish Gazette.
There are less than 2 weeks to go, before Lambeth’s young people vote for their new Youth Mayor.
