The shadow chancellor has called on banks to give loans to small businesses instead of paying bonuses to its executives.
Speaking on GMTV, George Osborne said: “Let’s end the big cash bonuses. If there’s spare cash at the bank, it should be lent out to small and medium businesses, to help people to keep their jobs.”
Osborne went on to stress that he was talking about senior staff at investment banks, not the “people at the cash tills”. He suggested that bonuses be paid in shares, eligible to be cashed in only after three years, so that profits could be ploughed into new lending, reports the Guardian.
But Liam Byrne, chief secretary to the treasury, said that Osborne’s suggestion “beggars belief”, and claimed that the Conservatives had resisted all of Labour’s efforts to support jobs and businesses.
Speaking to the Telegraph, new Royal Bank of Scotland chief executive Stephen Hester agreed with Osborne’s calls for reform, but urged politicians not to demonise the banking sector.