Government pledges RBS bonuses will be a lot lower this year

Mr Alexander told MPs that the Government was “certainly looking very hard at the remuneration proposals (at RBS) this year”.

Earlier this week, Labour leader Ed Miliband called on the Prime Minister to block any bonus payout for the boss of RBS, which is mainly state owned.

Mr Miliband told the Prime Minister that he would be judged by his actions over any financial awards given to the bank’s chief executive, Stephen Hester, who took over from former boss Sir Fred Goodwin after the bank needed a £45.5bn bailout.

David Cameron last week said that any bonus paid to Mr Hester would be a “lot less” than the £2m he was given last year, but would not go further.

Deputy Prime Minister Nick Clegg also insisted there should be no big bonuses for Mr Hester, but dismissed as “pure speculation” reports the chief executive was set for an award of £1.5m or more.

Earlier this month, Mr Clegg had said that the Government’s ability to influence bonus payments at RBS – which remains 83 per cent owned by the taxpayer – was “constrained” as a result of contractual arrangements entered into by the last Labour government.

RBS recently announced that it was cutting around 3,500 jobs over the next three years in a bid to downsize its investment banking arm.

The move at Global Banking and Markets (GBM), which has employees in Stoke, Manchester, Edinburgh and London, follows Government pressure for the state-owned bank to pull back from its ambitions to be a global investment player.

[email protected]