Otley’s MP has been accused of “siding with bankers” during a Parliamentary clash about limiting bonuses.
Labour recently put forward a motion calling on the Government to veto any attempt by the publicly-owned RBS bank to pay bankers bonuses of more than double their salaries.
But the proposal was defeated by 304 votes to 242, with Mr Mulholland – who has since tabled his own motion, supporting bonus caps – and 43 other Liberal Democrat MPs amongst those voting against.
Leeds North West Labour Parliamentary candidate Alex Sobel said: “David Cameron has refused to rule out approving bonuses of up to 200 per cent at RBS.
“Time and time again the Lib Dems claim to be keeping the Government in the centre ground, diluting the Tories, but time and time again in practice they do the opposite.
“Mr Mulholland would rather vote with Conservatives to protect London bankers’ rights to receive up to 200 per cent of their annual salary in bonuses than act to tackle the cost-of-living crisis his constituents are struggling with.
“It’s not even as if RBS is doing well – they’re still making losses and businesses across Leeds North West are telling me getting loans from any of the banks is incredibly difficult.
“The Prime Minister’s promise of a cap on total remuneration is a complete red herring because RBS is cutting another 2,000 jobs in its investment bank and many executives were paid bonuses worth more than 100 per cent of their salary last year.”
Mr Mulholland, however, whose subsequent Lib Dem-backed proposal calls for more to be done to control state-owned banks, dismissed the opposition day motion as “Labour Party posturing”.
He said: “I will continue to push for proper regulation of state-owned bankers’ pay and bonuses.
“Taxpayers rightly object to excessive bonuses at those banks that depend on a taxpayer guarantee. That’s why the coalition Government is fundamentally reforming the banking sector by ring-fencing high-street retail banks from investment banking so big banks can no longer rely on taxpayers to bail them out.
“No specific proposal has been made by RBS at this stage, so it is not possible to evaluate fully the merits and implications for shareholders. It is important for taxpayers that proposals by RBS are considered fully and properly, but I will continue to push for appropriate restraint.”
European laws brought in after the global economic crisis prohibit banks from paying bonuses of more than double basic salaries unless shareholders give their permission.
Mr Sobel says that, since the Government is the majority shareholder in RBS, the Chancellor would have the power to veto any such move.