The move comes with broad support from both the left and the right as well as most voters. Enough is enough.
The government yesterday publicly hardened its position on bank executive bonuses saying it will be "very, very robust" in clamping down on bonuses for 2008 in banks in which it holds shares. It will only allow modest payments for clerks earning around £20,000 a year.
It came as David Cameron said he would cap all 2008 bonuses at £2,000 for staff in banks owned or partly owned by the government. He also said the government should be willing to sue any bank executive who insisted their contract entitled them to a large bonus for the year.
The government shift, after intense private disagreements within the cabinet, came amidst reports that Lloyds plans to pay out up to £120m in bonuses for 2008 to thousands of staff. Its chief executive, Eric Daniels, came under intense pressure after Friday's shock profits warning caused by the HBOS banking group it rescued four weeks ago. The bank insisted that bonuses were typically £1,000 or less.
Daniels and other members of the Lloyds board have been banned from taking bonuses after receiving £17bn of taxpayers' funds to bolster the bank but Daniels has always insisted that staff should be allowed to receive their bonuses, which are typically around 10% of their salary.
The government's bonus clampdown comes as polls suggest Labour may be losing support to the Conservatives and the Liberal Democrats over the issue.
