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Brown calls for 'clawback' on bonuses

1st September 2009

Gordon Brown declares today that Britain will push for tough global action to crack down on excessive bonuses for bankers.

In an interview to mark the start of the political season, the prime minister calls for a "clawback system" to confiscate bonuses based on failed speculative deals. "Remuneration has got to be based on long-term success, not short-term speculative deals," Brown tells today's Financial Times. "There's got to be a clawback system in remuneration itself … if things are not working in year two."

The prime minister warns that Britain can not introduce any changes unilaterally, and pledges to work with international partners at the G20 summit in Pittsburgh later this month. He emphasises a joint approach by rejecting a French proposal to introduce a mandatory cap on bankers' bonuses.

Brown spoke to the FT to signal that the economy remains his main priority and that he hopes to take further action to promote global growth at the G20 summit.

The prime minister is "cautiously optimistic" about the future, echoing Alistair Darling's claim in yesterday's Guardian that he hoped to see a return to economic growth at the turn of the year.

"If you look at the position a year ago, we had people predicting that the recession would become a depression, with people thinking their savings would be at risk as banks collapsed," he tells the FT.

A key factor in avoiding a recession has been the way in which the G20 has worked together, Brown says. But it would be "a historic mistake … to return to business as usual", and he calls for more work to stabilise the banking and financial system.

The prime minister uses today's interview to show how he has refined his pre-election attack on the Tories. Senior ministers, most notably Darling and Lord Mandelson, were dismayed when Brown attempted in June and July to claim that voters would face a choice between "Labour investment versus Tory cuts". Ministers pressed Brown to acknowledge that all parties would have to manage the tightest public finances in a generation.

The prime minister today echoes Mandelson's warning in July that Britain will face spending restraint. "Some departments in the last round of public spending had a settlement that was lower than the previous round," he says. "So there's no problem about saying you've got to make the right decisions about the priorities for the future."

Brown makes clear that his attack on the Tories will focus on the way Labour was prepared to act to tackle the recession, a fiscal stimulus and an extra £5bn in spending this year, while David Cameron's Conservatives would have done nothing.

"Our opponents would not have created the measures that help homeowners and the unemployed. This is the testing point for your philosophy, as to whether it is right to help people in a point of need and difficulty, or whether a government should walk away and let the recession take its course," the prime minister says.

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