Banks must ‘pay smaller bonuses’

The scale of bankers’ bonuses remains a controversial issue

Prime Minister David Cameron has called on banks to pay smaller bonuses this year.

Speaking on the BBC’s Andrew Marr show he said banks should be more “socially responsible”.

He said that the Royal Bank of Scotland (RBS), which is majority-owned by the taxpayer, should not be “leading the way” on bonuses but should be a “back marker”.

But he also said that “micro-managing” the banks was not the answer.

There have been unconfirmed reports that RBS’s chief executive, Stephen Hester, is to get a substantial bonus for his work in 2010.

The Sunday Telegraph reports that RBS’s board is poised to award Mr Hester a cash-and-shares bonus of £2.5m at their meeting next month.

But Mr Cameron said the details of Mr Hester’s pay packet was “pure speculation”.

He warned against “banker-bashing”, saying that it was too easy to make banks the “scapegoats” for the recession.

Mr Cameron did say that the banks needed to do more to increase their lending.

He said: What I want to see is socially responsible banks behaving responsibly, and proper agreements on lending to businesses, large and small.”

He defended his government’s action on banks, saying that his was one the first governments in the world to introduce a banking levy.

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