Tory proposals are short term stop gap says Vince Cable

“The Tories have been deeply ambivalent on the much more fundamental question of what we do about the future of the banking system," said the Liberal Democrat Shadow Chancellor Vince Cable.

Commenting on the Tories’ call for High Street banks to ban the payment of bonuses of more than £2,000 in cash, Vince Cable said:“The Tories have been deeply ambivalent on the much more fundamental question of what we do about the future of the banking system.

“They have not given full backing to Mervyn King’s proposals on splitting up the banks and these bonus proposals are short term, stop gap solutions designed to stem public anger but which fail to get to the heart of the problem.

“The bonus pool in the banking system derives from the fact that the banks are making profits on the back of taxpayer guarantee. Until a properly regulated structure can be established, banks should be paying the taxpayer a premium for this guarantee.”