Osborne heading for fresh bonus backlash over RBS
Controversy as bank prepares to pay out £250m despite 'year of shame'
CHANCELLOR George Osborne faces a fresh backlash over bonuses as taxpayer-owned Royal Bank of Scotland prepares to hand out £250m to staff implicated in the Libor scandal.
Workers at the "casino" banking investment division will pocket the money next month just as the bank prepares to settle with UK and US regulators over rate rigging abuses, the Financial Times reports.
In a development likely to provoke public wrath, taxpayers will foot the bill for the bonuses, which will average £21,000 each for the investment division's 11,900 workers. They will simultaneously stump up an estimated £500m-plus fine to regulators in Britain and the US over the bank's role in the Libor scandal.
Former Labour minister Pat McFadden says there will be "enormous anger if UK taxpayers pick up the tab for the individual sins of traders who were trying to rig Libor rates". The bonus round, although less than last year's £390m pot, is set to shine the spotlight on the company, 82 per cent of which is owned by the government, after what the Daily Mail calls a "year of shame".
Allies of Osborne have predicted the fallout will not be as "high-octane" as in January 2012 when RBS chief executive Stephen Hester forfeited a £1m handout following "enormous political pressure". Hester himself went on to waive his 2012 bonus last June after computer glitches left customers unable to access money in their accounts. He said: "I don't deserve one."
John Hourican, the head of RBS's investment banking operation, is expected to leave RBS in the wake of the Libor scandal although it is stressed he had no direct knowledge of or involvement in the practice.