Northern Rock staff bonuses stun Liberal treasury spokesman Vince Cable

Staff bonuses of 10% at nationalised bank Northern Rock have provoked a political outcry.

Liberal Democrats treasury spokesman Vince Cable said the decision to award bonuses to staff at the failed bank was extraordinary.

“This is bringing the worst of the City bonus culture into a public body.When millions of people are facing pay cuts or even unemployment, this is indefensible. The government should step in to stop this now.”

But the Unite trade union said the bonus, which follows an agreement with the Treasury, was an appropriate reward for the “hard work and dedication” of staff at the bank.

Northern Rock was nationalised in February 2008 after a run on the bank the previous summer. Once the UK‘s fifth-biggest homeloan provider, it was taken into public ownership after it failed to find a suitable private sectorbuyer.

A Northern Rock spokesman refused to be drawn on how much money was being paid out, but pointed out that the bonus scheme had been announced in October.The reward comes after staff met targets on repaying the bank’s £26bn loan from the government.

He also said that no executives or senior management would benefit.

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