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Boris hits out at 'bewildering' Hester bonus

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Boris Johnson believes a state-owned bank like RBS “should be run on public sector lines” and has hit out against the near-£1m bonus awarded to Stephen Hester.

The mayor of London was “at a loss to justify” the scale of the payment and said ministers should have blocked the bonus payment to the chief executive of the bailed-out bank.

Johnson said he found it “far-fetched” that the government could not control the level of the bonus.paid out, but said he wanted to end “incessant banker bashing”.

“I find it absolutely bewildering because RBS occupies the same status in the economy as Gosbank did in the Soviet Union: it’s a state-owned bank,” said Johnson, speaking from the World Economic Forum in Davos.

“The idea that this is not in the control of the Government seems to me to be far-fetched. Stephen Hester is an able man probably doing a difficult job and his contract must have been drawn up, I guess, when he was appointed in 2008 under Alistair Darling and Gordon Brown.

“I do not know what they were thinking of when they drew it up that way, but it certainly seems to me to be right that the government should step in and sort it out.

“People will not understand how somebody can get a whacking great bonus like that when they are basically running a state-owned concern, and I am at a loss to justify it.”

Johnson stressed that distinctions should be drawn between private sector banks that have received government bail-outs and those that have not when it comes to bonuses.

He said: “If you are going to have effectively a state-owned institution then there should be a concept of public service and there should be a concept of duty to the wider British public in the form of taxpayers who, after all, stepped in to bail out that bank.

“I have sympathy with Mr Hester in the sense that the terms of his contract will have been drawn up, he will feel that he has done a very hard job well. But this is not a normal bank. This is not a free-booting, private sector, risk-taking enterprise, this is a state-owned concern that taxpayers have had to step in and bail out.”




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