Private sector banks, as well as the state-backed Royal Bank of Scotland and Lloyds Banking Group, have a responsibility to rein in big bonuses, Ed Miliband has said.
Speaking at the Sheffield Political Economy Research Institute on Thursday evening, the Labour leader said this was because while banks such as Barclays were not publicly owned they should show restraint as they were effectively underwritten by the taxpayer.
Barclays is to publish its annual profits and total bonus pot for 2011 on Friday. It well also reveal the size of the bonus awarded to its chief executive Bob Diamond.
"Some argue that it is no business of the public what bonuses banks pay," Miliband said.
"I fundamentally disagree, because even banks which are not publicly owned implicitly benefit from a taxpayer guarantee, to the tune of billions of pounds.
"That is why we need change in the bonus culture across all our banks, and we need responsibility from top to bottom across our society.
"Across the economy we need executives to recognise that exceptional rewards should only be for exceptional performance.
"Tackling excessive executive pay and bonuses is not an end in itself but a necessary first step towards a bigger change in our economy in which people get fair rewards for their contribution at every level of society."
Downing Street has so far not made any direct comment on Diamond's bonus, arguing it is different to the case of RBS boss Stephen Hester, as Barclay's did not take any direct money from the taxpayer during the financial crisis.
Miliband accused the government of defending the interests of the "irresponsible few" in the row over City bonuses.
And he dismissed suggestions he was "anti-business" for tackling excessive pay, insisting he was standing up for the wider economy.
His comments came after George Osborne bucked the current political debate by defending the principle of "rewards for success" in a speech to business leaders.
Osborne warned that the row over bonuses and pay threatened to undermine jobs and prosperity provided by a free market economy.
"George Osborne says that action to tackle big bonuses is 'anti-business'. It is not," Miliband said.
"It is pro-business to demand responsibility at the top and an end to the something-for-nothing culture which has damaged our economy in the financial crisis at every level, wrecked businesses and left everyone else squeezed.
"By defending an unreformed bonus culture, this government confuses the interests of the economy as a whole with the interests of an irresponsible few."
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