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New analysis shows the average City worker
could already pocket almost £120,000 in bonuses before cap was
removed
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Union body says move to lift cap is a “bitter pill”
when millions are struggling with the cost of living
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TUC renews call for debate on wealth
inequality
The TUC has accused the Conservative government of fuelling a
“greed is good” culture in the City as the cap on bankers’
bonuses is lifted today (Tuesday).
New analysis from the union body shows that within the previous
cap even those on average City salaries could pocket as much as
£120,000 in bonuses.
This is the equivalent of 7 times the average pay of a care
worker (£17,780) and almost 4 times the salary of a median earner
(£32,400).
And for CEOs and higher paid executives the amount that could be
kept in bonuses was far higher. Those on base salaries of
£250,000 would have been able to gain, for example, bonus
payments of up to £500,000.
Unlimited bonuses
The previous cap – which was introduced by the EU to curb
excessive risk-taking in the wake of the financial crisis – meant
that bankers’ bonuses were limited to two times their salary.
But now bankers will be able to cash in on unlimited bonuses.
The TUC has blasted the decision as “obscene” at a time when
millions are being hammered by the cost of living crisis and
struggling to get by.
Working people are suffering the longest pay squeeze in modern
history – with wages still below their 2008 level.
Corporate excess
The union body said that while ministers have repeatedly called
for pay restraint for most workers, they have been silent over
excess in the City.
The TUC today renewed its call for an economy that rewards work
not wealth and for fairer taxation.
TUC General Secretary Paul Nowak said:
“The Conservatives are presiding over the worst cost of living
nightmare in generations.
“But as millions struggle to cover the basics, executive bankers
are now being given unlimited bonuses.
“City financiers are already raking it in. They don’t need
another leg-up from the Tories.
“The bonus cap was introduced to curb reckless profiteering after
bankers crashed the economy. But seems perfectly happy with
fuelling a ‘greed is good’ culture in the City.
“He’s following in the footsteps of his predecessor – feathering the nests of the wealthiest while turning
his back on working people.”
On the need to tackle wealth inequality, Paul
Nowak added:
“Rampant inequalities already blight every corner of the country.
This decision will just make things worse – and do nothing to
boost growth or competitiveness.
“We need a reset – and an economy that delivers better living
standards for all – not just those at the top.
“That’s why we urgently need a national conversation on taxing
wealth. It’s high time the wealthiest paid their fair share.”
ENDS
Notes to editors:
Methodology: Previously, the banker’s bonus cap
limited bonuses to twice a worker’s salary. The average base pay
for those working in Financial and Insurance Services was £59,896
for the 2022-23 financial year according to data from the ONS.
This average is based on all workers in finance and insurance,
which is a much broader category than those most likely to be
advantaged by the bonus cap in the City of London.
The average salary for all workers over this same period was
£32,414.
The latest data from the ASHE found that average weekly earnings
(excluding overtime) was almost £342 for those working in caring
personal service occupations, or £17,779 annually.
