Cable quizzes Byrne on the taxation of bank bonuses (Twickenham & Richmond Liberal Democrats)

Cable quizzes Byrne on the taxation of bank bonuses

December 21, 2009 6:40 PM

banker • [Dec 15] Vincent Cable: ON the Government's proposal to tax banks' bonus remuneration, are the Government yet in a position to say which of the 192 regulated banks it will apply to; what the main exempted categories are, be they shares or contractual agreements; and, as it will take a long time to suss out the difficult avoidance possibilities, whether they have ruled out the possibility of extending the policy into the next financial year?

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Liam Byrne (Chief Secretary, HM Treasury; Birmingham, Hodge Hill, Labour)

I understand that the draft guidance has been published. The proposals that we have introduced are designed to bite on banking groups, but we remain open to the possibility of extending the legislation and the tax if the avoidance measures that some have talked about are put into practice.

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Vincent Cable: But does the Minister not agree that one of the important pieces of unfinished business is the largely taxpayer-owned £1.5 billion bonus pool in RBS? As the board of directors publicly defied the Government over that matter, do the Government propose to take any further action, either by replacing those directors or by giving them fresh instructions about how to deal with that bonus pool?

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Liam Byrne (Chief Secretary, HM Treasury; Birmingham, Hodge Hill, Labour)

RBS is a bank in which we exercise a certain degree of influence over remuneration policies-but the hon. Gentleman will be pleased to hear that its management have not yet made proposals for a bonus pool.

Richmond upon Thames Liberal Democrats: