City bonuses dwarf public sector and spark fresh fury

ANGER over City largesse was reignited yesterday as figures highlighted that workers in the banking and insurance industries pocketed average bonuses of £12,000 in the last financial year.

The average bonus paid out by the two sectors in the year to April was £1,500 lower than the previous 12 months, according to the Office for National Statistics (ONS). But they still dwarfed payouts in the wider UK economy, where bonuses averaged £1,400.

City windfalls accounted for 36 per cent of the £37 billion of bonuses across the economy, the ONS revealed, despite just 4 per cent of total employees working in the finance and insurance industry.

The news angered trade unions although defenders of the financial services payouts cited the sector accounting for 10 per cent of the UK’s GDP and £1 in every £10 of tax paid.

Unison general secretary Dave Prentis said: “It is a disgrace that the lure of big bonuses fuelled the recession and yet today’s figures show finance workers still bringing home more in bonuses than many public service workers get paid in a year.

“The pay freeze is having a devastating impact on the families of nurses, home care workers, paramedics, dinner ladies and millions more public service workers.

“At the other end of the spectrum the government is happy to sit back and let the bonus culture go on. It is time to tackle this divided Britain and put an end to this damaging pay freeze.”

The year-on-year fall in City remuneration came after Bank of England governor Sir Mervyn King called on banks to reduce payouts and hoard cash to help them deal with any further shocks from the financial crisis.

Total UK bonuses rose 3 per cent in the year, with most industries enjoying an average increase, helping push payouts in the non-financial sectors close to pre-recession peaks.