Northern Rock bonus payout 'indefensible'

Wednesday, 21 January 2009 12:00 AM

By politics.co.uk staff

Northern Rock employees will be given a bonus worth ten per cent of their salary for their 'dedication' to the bank.

Most of the 4,500 employees of the state owned bank will receive the ten per cent bonus after an arrangement agreed by the Treasury last year.

This move has been criticised by Vince Cable, Liberal Democrat economics spokesman, as "indefensible".

He said: "This is an extraordinary action from a state-owned bank which still owes billions to taxpayers.

"When millions of people are facing pay cuts or even unemployment, this is indefensible. The government should step in to stop this now."

Far from opposing the move to pay the bonuses, prime minister Gordon Brown has supported the bank's actions.

"Northern Rock, as I think is well known, has repaid its debts to the government at a rate faster than originally planned for. Operational decisions such as this are a matter for Northern Rock."

Trade unions have also lent their support to the bank staff, citing staffs' hard work during difficult times as an acceptable reason.

Rob MacGregor, Unite national officer said: "Unite members and staff at the bank have worked exceptionally hard in extremely difficult circumstances.

"They have experienced the loss of friends and colleagues through compulsory redundancy yet have continued working solidly with dedication and commitment.

"These have been very difficult times and this bonus agreed with the Treasury was promised if targets were met. Their dedication and commitment has meant that they have not only achieved but exceeded the targets set.

"The bonus will be welcomed by the staff that have had to endure a very difficult working environment, including a freeze on their normal bonuses and promotions for some 18 months.

"This is fair recognition of their hard work and dedication."

The bank was saved from collapse in 2007 after Alistair Darlilng stepped in to guarantee the banks savings accounts.

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