Banking Bill

I was about to address that point and respond to the hon. Gentleman's contribution. The conditions on remuneration imposed on the banks accessing the recapitalisation scheme are in the public domain—they are part of the placing agreements, which have been placed in the House of Commons Library. The hon. Gentleman seemed to say that the Government are getting nothing out of the banks' recapitalisation, but let me correct him on one point. Payment on the coupon of the preference shares is not deferrable; they are non-cumulative preference shares, and we expect to get paid as a Government. If he is suggesting that the Government should not have taken the decision to recapitalise the banks to protect the stability of the financial system and depositors, he is simply wrong. The action that we have taken has been widely welcomed, many other countries have adopted the approach and the UK has led the way in ensuring that banks have the capital requirements that they need on liquidity and on credit guarantees. My hon. Friend the Member for Leyton and Wanstead asked what the FSA is doing on remuneration, and I want to be clear to him that the FSA is conducting a review of executive remuneration and regulation. It has written to the chief executive officers of the major banks, setting out good practice on remuneration. Looking forward, I should say that the FSA intends to take account of UK firms' adherence to the principles of good practice on remuneration when assessing risk, and it is important that it does so. Let me directly address the point of my hon. Friend's new clause, which seeks to introduce some quite extensive new regulations. I hope that through what I have said, I have reassured him that, when the Government have acted on bank recapitalisation, we have taken a strict line on executive remuneration. We have said clearly and up front that access to the recapitalisation scheme is subject to the remuneration conditions that were determined as part of the discussions about the Government's investment. We think that that is the right approach, because it gives the banks certainty about what is expected of them. It is our clear view that we have no reason to believe that the conditionality imposed on the banks participating in the recapitalisation scheme will not be followed. We will of course monitor the situation, not least through the appointment of non-executive directors, but we do not currently believe that there is a case for regulation.