Bankers’ bonuses have doubled since the 2008 financial crash, according to research by the TUC, which accuses the government of enriching City financiers while “holding down” the pay of key workers.
The unions’ umbrella body said bonuses in finance and the insurance sector have reached a record £20,000 a year on average – which it says is almost one-and-a-half times the average pay collected by teaching assistants.
The TUC found that average City bonuses increased by 101% in cash terms between 2008 and 2022, prior to the chancellor, Kwasi Kwarteng, announcing plans last month to scrap the bankers’ bonus cap.
“Everyone who works for a living deserves to earn a decent living, but ministers are holding down the pay of millions of key workers, while lining the pockets of City financiers,” said Frances O’Grady, general secretary of the TUC. “There is simply no justification for lifting the cap on bankers’ bonuses – especially when nurses and teaching assistants are having to use food banks to get by.
“The City is already a millionaire’s playground. It doesn’t need another helping hand from the Conservatives,” she added. “Ministers should be clamping down on this greedy bonus culture by putting workers on company pay boards and introducing maximum pay ratios.”
There are 3,519 bankers working in the UK making more than €1m (£880,000) a year, according to the European Banking Authority (EBA). That is more than seven times as many as in Germany, which has the second-highest number of €1m-a-year bankers.
The latest EBA figures show 27 UK bankers were paid more than €10m in 2019, while two UK-based asset managers received between €38m and €39m, and one merchant banker was paid €64.8m. The merchant banker received a fixed salary of €242,000, topped up with a bonus of €64.6m.
O’Grady said that instead of “featherbedding the 1%”, the government needed to act fast to increase wages across the economy.
“That means boosting the minimum wage to £15 an hour as soon as possible, funding decent pay rises for all public sector workers and introducing fair pay agreements for whole industries,” she said. “But this is a government on the side of the super-rich – not working people.”
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Sharon Graham, general secretary of the Unite union, said: “Some companies in banking and insurance have been profiteering on the back of inflation after already making massive profits year on year. Now this government has removed the cap on mega-bonuses for bankers that was meant to help prevent us having to pay for another crash like 2008.”
