MPs criticise Network Rail directors for seeking large bonuses, and Labour leader says companies must show responsibility
Ed Miliband will broaden his attack on the coalition's divided Britain by calling a Commons vote next week to urge an end to the bonus culture.
MPs heaped abuse on senior directors of Network Rail for seeking large bonuses from a shareholders' meeting due next week, while on Friday profit figures for Barclays bank are due to be announced, potentially putting its chief executive, Bob Diamond,in the firing line.
The anti-business mood has been fuelled by reports that Network Rail's chief executive, Sir David Higgins, whose basic salary is £560,000, could be shortly awarded up to £336,000 on top in an annual bonus - plus a total of £2.8m over a five-year period. Similar bonuses are due be handed to board members in a reorganisation of the incentive structure.
Shadow ministers and Conservatives on Thursday called on transport secretary, Justine Greening, to exercise her right to attend next week's board meeting and block the bonuses being awarded at a time when it is breach of its licence obligations.
Speaking in a Westminster debate, Ann Main, MP for St Albans, said: "There cannot be bonuses that are rewards for failure. Now is not the time, and I hope the company will stand with the travelling public and decline their bonuses."
But transport minister Norman Baker told MPs that the powers the government had inherited from Labour over bonuses were "extremely limited". He said while Network Rail performance over the last year had been "iffy", it had been improving, even if the firm had not met its targets. "We expect bonuses to be dealt with in a responsible manner," Baker said.
In a speech on Friday Miliband will promise to use the Commons debate to say that "too many are getting bonuses which are too big too often. All companies must show responsibility, but banks have a particular responsibility, because they are either directly or indirectly supported by the taxpayer."
The Labour leader will also call for "one nation banking", claiming that "if banks do not change their ways ,the only result will be further isolation from society, greater public anger, and an economy which does not pay its way".He will warn that "exceptional rewards for exceptional performance means the kind of huge bonuses which have caused such controversy recently should not be handed out for just doing your job. They should not be a one-way bet."
Greening said in December that Network Rail executives should forget about bonuses this year. She spoke after the government's Office of Rail Regulation found Network Rail had failed to meet its contribution to punctuality targets and was in breach of its licence obligations.
The prime minister's spokesman stressed on Thursday: "We want to see responsibility and restraint." But he pointed out the government had only one vote (representing the Department of Transport) at meetings of Network Rail's 120-strong body of members. The other 119 votes represent the various passenger and freight train operators, rail manufacturing and infrastructure companies, and individual members of the public as stakeholder representatives; all are chosen by an independent panel.
Network Rail is technically in the private sector, but following a reorganisation by Labour has no shareholders and is funded by borrowing backed by government guarantee. It also receives very substantial direct and indirect subsidy. One reason to say it is not in fact in the public sector is because otherwise its £20bn debt counts as government expenditure. Ed Miliband Executive pay and bonuses Pay House of Commons Network Rail Patrick Wintour guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds