Taxpayers pay bonus for Rock employees

Over recent months the government has been using taxpayers’ money for a variety of purposes, sparking concern amongst opposition parties and the public with regards to how the public purse is being used.

However, according to a recent report taxpayers have found themselves paying for more than they bargained for, after it was revealed that Northern Rock has been paying out hefty bonuses to its employees, and the money has come from the taxpayer’s pocket.

Northern Rock ran into problem in the latter part of 2007, when it became one of the first high profile victims of the global credit crunch. After becoming the first victim of a run on a British bank in around one hundred and fifty years Northern Rock was nationalised early last year, and was bailed out by the government using taxpayers’ money.

However, it has recently been revealed that employees of the troubled bank have received bonuses of between 6 and 10 percent recently, and with the average salary set at £22,000 this equates to around £2000 per employee, with the total amount estimated to come to around £8.8 million based on bonuses for its four thousand or so employees. Senior officials from the bank are said to have received an even bigger bonus.

Vince Cable from the Liberal Democrats said: ‘This seems an extraordinary action from a state-owned bank which still owes billions to taxpayers. When millions of people are facing pay cuts, or worse unemployment, this seems extremely crass.’

The Shadow Chief Secretary to the Treasury, Philip Hammond, added: ‘Once again, the confusion in government policy is exposed. The state-owned Northern Rock is paying millions in bonuses to its staff, while Gordon Brown boasts of a banking bonus crackdown – just days after the Government reversed the policy of shrinking Northern Rock, that they are being rewarded for delivering.’

Tags: bank, Northern Rock bonus, Taxpayers pay bonus, Northern Rock employee bonus, economics, Business Finance