RBS bonuses: Labour urges Chancellor to enforce EU limit
Labour is urging Chancellor George Osborne to block any attempt by Royal Bank of Scotland to pay bonuses of up to double its bankers' annual salary.
The Financial Times reported that RBS will seek to invoke an EU rule that it can pay bonuses up to that limit if they are approved by shareholders.
But Labour has tabled a Commons motion calling on the government - RBS's biggest shareholder - to reject it.
A Treasury source told the BBC that RBS had made no request regarding bonuses.
The normal limit for bonuses set by the EU is equivalent to one year's pay but the EU rules do allow this to be doubled with shareholder approval.
However, the Treasury had already launched a separate legal challenge arguing against the EU's right to set any limits on banking bonuses at all, saying that such intervention could lead to an increase in base pay and undermine financial stability.
BBC business editor Robert Peston said the situation created an "awkward twist for the government".
He said: "Although pay levels for bankers have fallen... the sums shelled out still look enormous at a time when earnings for the vast majority of households continue to be squeezed.
Shadow treasury chief secretary Chris Leslie said: "At a time when families face a cost-of-living crisis and bank lending to business is falling, it cannot be right for George Osborne to approve a doubling of the bank bonus cap.
"As the majority shareholder, the government should reject any request from RBS to increase the cap. We will put this to a vote in the House of Commons as part of our opposition day debate on the government's wider failures on banking."
Branch salesThe BBC's political editor, Nick Robinson, said the move by Labour is part of its agenda to argue that the Prime Minister and his chancellor "stand up for the wrong the people".
On Friday, Mr Miliband is expected to flesh out details of a proposal made last year to force the big High Street banks to sell off branches, the BBC understands.
He wants to promote the growth of new banks that could challenge the "big five" - Royal Bank of Scotland, HSBC, Lloyds, Barclays, and Santander.
The BBC's Newsnight reported that Mr Miliband may suggest a cap on the size of banks, possibly based on their share of the UK market.
However, business sources told the programme that such an intervention was another example of an anti-business sentiment in the Labour Party.
Last year, Mr Miliband said a new Labour government would impose a price freeze on energy prices.
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