To ask Her Majesty's Government what assessment they have made of the prospects for the full implementation of the Financial Services Authority's draft code of practice for executive remuneration, especially by companies in which the taxpayer has a stake.

The FSA has published its remuneration code of practice which comes into force on 1 January 2009. In advance of this all the banks subject to the code had to provide the FSA with a remuneration policy statement to demonstrate compliance.

The Government have also asked the FSA to provide an annual report on remuneration practices, including compliance by firms with the new code. This report will assess whether remuneration practices are likely to lead to a build up of systemic risk, and make recommendations for action if this is thought to be the case.

The banks in which the Government are a shareholder are managed on an arm's-length commercial basis by United Kingdom Financial Investments (UKFI). The Government expect their investee banks to beat the forefront of complying with the FSA's code and UKFI is working with the banks as a shareholder to ensure their remuneration policies are aligned with long-term value creation.