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No bonuses at bail-out banks, says Darling

Pa
Monday 13 October 2008 09:40 BST
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Chancellor Alistair Darling pledged today that no bonuses will be paid this year at two banks bailed out on an unprecedented scale by the Government.

Speaking to BBC News, Mr Darling said there had to be "strings attached" to the Government's agreement to pump £37 billion into RBS and HBOS.

He said: "We've already communicated to the two banks concerned that the bonuses will not be paid this year."

Last week Prime Minister Gordon Brown announced that City bonuses would be curbed at banks already bailed out by the Government, amid concerns that the cash would be used to line executives' pockets.

Mr Darling told the BBC today: "We've laid down stringent conditions in relation to bonuses this year, making sure executives get rewarded for success, not failure."

However, he refused to comment on controversy surrounding RBS boss Sir Fred Goodwin, who will receive no bonus but still reportedly stands to benefit from a pension worth more than £500,000.

The bank chief is to resign after being forced to go cap-in-hand to the Government.

Mr Darling said that taxpayers' interests will be protected as the Government plans to appoint directors to the boards of both banks.

He said conditions would be put in place in return for such vast sums of public money.

The Chancellor said: "There are strings attached because we have to look after the taxpayers' interests."

He also stressed that the Government will benefit from any dividends as a shareholder in the two banks.

Mr Darling said: "We are taking a substantial shareholding. They are shares and we will get the reward for that."

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