Jo debated bankers' pay, bonuses and honours with Labour MP, Chris Leslie, on BBC Radio 4's Week in Westminster.

Jo reminded Chris that the RBS contract was inherited from Labour, but agreed that "it is certainly the case that the banking community has managed to extract very large rents from the privileged position they occupy in our economy.  We have the problem of too big to fail – this Government has set about putting in place a regulatory framework that addresses the big underlying problems."

However, Jo said that it was wrong to "vilify a particular profession or group of people", which he described as a "completely immature response" to today's challenges.

On corporate pay, Jo said: "Government cannot be micromanaging every single board in the country.  If you have any understanding of how corporate governance actually works in this country, you would know that shareholders elect the board members, who in turn appoint remuneration committees.  It's not working perfectly, but I don't think what we need in this country is to have politicians second-guessing the decisions of boardrooms.  It is not in the interests of British business to have souped-up MPs deciding how people should be paid.  This Government has done more to address the failures of corporate governance in this country in the last 18 months than the previous Government did in 13 years – for example, making a vote on pay mandatory."

When questioned on the issue of honours, Jo explained: "The forfeiture committee can look at these people any time" if there is "compelling evidence they  brought the honours system into disrepute.  This committee exists in order to be independent of government.  We don't want to suddenly create a system that would be totally dependent on Government patronage – that would be a massive step back"

To listen to the entire programme click here