January 21, 2009

Bonuses at Northern Rock stir debate

Bonuses paid to staff members of Britain's nationalized Northern Rock bank have provoked criticism from some corners, support from others.

The Treasury approved a bonus of 10 percent of salaries to staff members for their dedication to the bank, The Times of London reported Wednesday.

But, Liberal Democratic Treasury spokesman Vince Cable decried the bonus pay. This is bringing the worst of the City bonus culture into a public body, he said. When millions of people are facing pay cuts or even unemployment, this is indefensible, he said.

Prime Minister Gordon Brown said the bonuses were a matter for Northern Rock, pointing out the bank has repaid its debts to the government at a rate faster than originally planned.

Unite union leader Rob MacGregor also backed the bonus plan. Unite members and staff at the bank have worked exceptionally hard in extremely difficult circumstances, he said.

The bank was bailed out by the Treasury, which guaranteed savings accounts after a 2007 run on the bank, The Times said.