Banking

Chi Onwurah Excerpts

Wednesday 15th January 2014 Commons Chamber

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

The Minister has spoken in strong terms about the experience of the financial services. Does he accept that the unique way in which bonuses drive short-term risk taking led to the scandals that we witnessed, and, indeed, to the financial crisis? Does he really believe that the reward for short-term risk taking behaviour to meet bonus targets should be more than 100% of the reward that someone receives for doing his or her own job?

[Sajid Javid]

What I do accept is that badly structured and badly designed bonuses will lead to bad behaviour. I am sure that the hon. Lady herself accepts that if an arbitrary cap is imposed on bonuses and it leads to an increase in fixed pay but no overall fall in overall pay, the bad behaviour will actually worsen.

We are putting our house in order. We are learning from the huge mistakes of the last Government, and are ensuring that we create a country in which the public can trust that their money is secure and our banking sector can flourish.