Peer Resigns Over Small Business Banking Deal
After yesterday’s announcement by Chancellor George Osbourne that the Project Merlin talks had finally come to a satisfactory conclusion, Lib Dem peer, Lord Oakeshott, stepped down from his place in the front benches.
The banking deal, announced after Prime Minister’s Questions yesterday, sees Britain’s "big four" banks increasing lending from £179bn to £190bn with the promise that small business lending will increase (from £66bn to £76bn), bonuses at banks will be restrained and there will be greater transparency in the pay system at the UK’s top financial institutions, some of them seen as being "propped up" by UK taxpayers.
However, Lord Oakeshott, the Treasury Spokesman in the House of Lords, branded the deal as "pitiful" and quipped of Project Merlin:
"If this is robust action on bonuses, my name’s Bob Diamond."
Bob Diamond is the President and CEO of Barclays PLC and is being considered for an £8m bonus this year.
Soon after George Osbourne announced the deal, including limiting bonus payouts at Lloyds and RBS to £2000 in cash and the rest in shares, it was announced that Stephen Hester, the CEO of RBS, was to receive a bonus of £2.04m for 2010. Similarly the Lloyds boss, Eric Daniels, received a bonus of £1.45m for his performance in 2010.
Lord Oakeshott said that, despite the promise of more money being available to SMEs, there was no guarantee that the money would actually be lent to small businesses. He criticised Project Merlin for not living up to the coalition government’s promise of "robust action" against the banks and duly stepped down in protest.
Recent reports indicate that 50% of Tory party donations came from the City.