On the Politics Show, Sunday 8 February 2009, Jon Sopel interviewed Nick Clegg MP, Leader of the Liberal Democrats.
Nick Clegg on the Politics Show
JON SOPEL: Joining me now, the Leader of the Liberal Democrats, Nick Clegg, Nick Clegg, welcome to the Politics Show. We heard the Chancellor, Alistair Darling say this morning that no one should be rewarded for the price of failure. Is that good enough?
NICK CLEGG: No, I think the government's response has been pathetic, timid. You don't need a review, you don't need an enquiry to answer the simple question, should senior bankers receive bonuses or not because the answer is no. I think there should be no bonuses at all for senior executives, certainly in those banks that have received any public support. The public after all, every single person in this country has coughed up a thousand pounds per person, just for the first bale out, the thirty seven billion pound bale out and it's quite right that we now say that money should not be used for further bonuses for people who in many respects are responsible for getting us in to this trouble in the first place.
JON SOPEL: So no bonuses for senior executives. What is a senior executive.
NICK CLEGG: I think anyone on the Boards of these banks, who actually run the banks, set the business strategies, should not receive any bonuses at all. I would go further, I think in the future, I think in the future, people at the top of the banks in this country, shouldn't get cash bonuses full stop, which will leave them to taking short term decisions, which lead to ruin. Give them memberships of golf clubs, give them big fat salaries if you want but don't give them these bonuses that reward them for taking risks, gambling casino like with our money.
JON SOPEL: Why not just simply say no to bonuses for anyone in a bank that has taken state funds, because presumably, as you pointed out, it's our tax payers money. If they hadn't taken this money, the banks would have fallen over. Their bonus, they've still got jobs.
NICK CLEGG: Yeah. Well absolutely no to, no to bonuses for people who run these banks. People lower down, people who are running the cash desks and so on, I think that's a wholly different matter. I think for the people, the traders and so on who do get bonuses and are used to getting big cash bonuses, I think you need to change the bonus structure completely, so that any bonus they get, let's say in shares and stock, can only be cashed in after several years. So they've got incentive to do things which is good for the long term health of the banks. I also, by the way, think there's a big question mark about what do people do with the bonuses they received in the past. I read this weekend that Fred The Shred Goodwin, who ran RBS, if he has a Shred of decency or shame, I think he should be giving back some, if not all of the 2.8 million pound bonus that he received for instance in 2007. (overlaps here)
JON SOPEL: Isn't that just grandstanding.
NICK CLEGG: No, it's not grand standing. I think the public (interjection)
JON SOPEL: What difference will that make.
NICK CLEGG: I think it will make a huge difference if the public saw that these great masters of the universe, who go us in to the mess or were largely responsible, not exclusively, but largely responsible, for playing with people's money, indulging in sort of casino capitalism, sort of roulette style approach to our money, taking risks, taking gambles, cutting deals
NICK CLEGG: Is it not unusual, we've got President Obama, who has put a cap on executive pay for companies who receive state help. You've got President Sarkozy, not exactly Gordon Brown's greatest fan at the moment, in France, saying to the bankers from the six leading French banks, give your bonuses back for the last year. You've got the Swiss, Swiss Government, who is always considered to be almost in the pockets of the Swiss banks, saying to the bankers at the UBS bank, you're going to have to slash bonuses by 80%. What do we have in this country from Gordon Brown and Alistair Darling, a review. It's pathetic.
JON SOPEL: Right. You mentioned President Obama there, and the cap on pay. Do you support that.
NICK CLEGG: I certainly support, as I say, a complete elimination of bonuses for people at the top.
JON SOPEL: You just cited - why not just say, no one in any bank earns more than the equivalent of five hundred thousand dollars, which is where he's pitched it. So you know, three hundred and fifty thousand pounds.
NICK CLEGG: My view is that what the government should do next, with the weakest banks, is take them in to full temporary nationalization. You've got this half-way house, where the government has got a 70% stake in RBS, Nat West, but isn't actually honest enough to say, we're now going to control this bank. Take them in to temporary nationalization and then of course, in effect, during the time in which these banks are in national ownership, you would in effect be treating the people at the top, as you would treat perhaps very senior civil servants.
JON SOPEL: Well sorry, I'm just wondering - because I think you're trying to sound tough and sort of say, the government is being weak and dithering and kind of feeble over this and yet actually, when we analyze what you're saying, you're not saying much more than the government is. So why not, let me go back to .
NICK CLEGG: saying no bonuses.
JON SPOPEL: What about the Obama question, why not just put a cap on (interjection)
NICK CLEGG: Because the issue with the banks is the bonuses not the salary and partly what's gone wrong. For instance, I mentioned earlier, Sir Fred Goodwin. In 2007, which we now know, with the benefit of hindsight, was the height of bankers irresponsibility, he received just over four million pounds in 2007. The vast majority of that, almost three million, was made up of bonuses, in other words, what we've got in this sort of casino city culture, is people receiving so much in bonuses and .. actually only a fraction of the total in salary; so the issue are these monumentally large bonuses and they, for senior people must end.
JON SOPEL: I just want to talk to you about one other aspect of this at the moment because interest rates, as I said in that introduction, have fallen to their lowest level for three hundred years. If you are a saver and you are dependent on your income from savings, as I suspect quite a lot of our viewers may well be, what are you going to do for them because the liberal democrats have had very little to say about savers.
NICK CLEGG: Well, we've had a number of things to say. For instance, we believe that pensioners who get pension benefit, pension credit, it is calculated by the government that they're getting a 10% return on their savings. That's a nonsense, no one can 10% return on their savings, so we have plans, in order to make sure that is changed, so they get a better return on their pension credits but it's hitting particularly people who have savings, who are retired and rely entirely on their savings and clearly, we need to do more for them.
JON SOPEL: What.
NICK CLEGG: For a start, you need to up-rate of course the pensions in the first place, that's why we do want to see the earning link restored and restored immediately. That can and must be done. There are other things of course you can do for people in that bracket. You can dramatically change what they have to spend for instance on their heating bills. We are the only party at the moment saying that it is absurd that you have to pay more, a pensioner, living alone in their home, has to pay more to heat their single room than say a multi millionaire does you know, to heat a five storey mansion because you pay more for the first units of energy used than later units of energy. These are all the kind of things that make a huge difference to those savers, particularly to those elderly people, who are being hit very hard.
JON SOPEL: Okay, Nick Clegg, we must leave it there. Thanks very much indeed for being with us.
END OF INTERVIEW WITH NICK CLEGG
Please note BBC Politics Show must be credited if any part of these transcripts are used.
NB:These transcripts were typed from a recording and not copied from original scripts.
Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for their accuracy.
Let us know what you think.
The Politics Show Sunday 8 February 2009 at 1200 GMT on BBC One.
Our e-mail address
You can reach the programme by e-mail at the usual address or you can use the form below to e-mail the Politics Show.
You will be returned to the Politics Show website after submitting the form.
Disclaimer: The BBC may edit your comments and cannot guarantee that all emails will be published.