Osborne lets public bank bonuses rip, despite right’s obsession with public sector pay

By Will Straw | Published: July 20, 2011

It is widely reported this morning that bank bonuses totalled £14 billion this year – the same as last year and up from £8 billion a decade ago. But falling under the radar is the fact that the bonuses paid out by the temporarily nationalised banks are greater than bonuses paid to every single public sector worker in the country.

Data from the Office for National Statistics (replicated below) shows that although just 1 per cent of the workforce work for publicly owned banks, they paid out 1.6 per cent of the country’s £35 billion bonus pool. By contrast, the public sector, which employs close to one in four Britons, paid out just 1.5 per cent.

The staggering statistics underline the capitulation by the Government on bank bonuses. Earlier this year, the Chancellor cleared the way for bonus payments to the bosses of the bailed-out banks – Royal Bank of Scotland and Lloyds Banking Group. Whereas in the past two years, the chief executives of both banks have waived their bonus payouts.

Reacting to the news, Lord Oakeshott, the former Liberal Democrat Treasury spokesman, said: ‘These banking bonus figures show sheer greed.

‘Our country won’t believe “We are all in this together” until the Government gets a grip on bank bonuses.’

George Osborne should take note.

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  • Dave Citizen

    Come off it Robert – your logic seems to be: the last lot messed up so you can’t moan when the new lot do like wise. If that’s the basis for judging governments then we’re all doomed.

    I do agree that new taxes are desperately needed though. The aim should be to bring all people living in our society into line with the basic principle that it’s anti-social if anyone enjoys material wealth that’s more than a certain number of times greater than say a paramedic or front- line soldier can earn (with overtime if you like).

    What do you think would be a fair multiplier – 50 times what a soldier can get?

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  • Ed’s Talking Balls

    Come off it Dave – as I read it, Robert was simply providing a proper context.

    Yes, of course people should be free to criticise a government when it is acting (or failing to act) in a certain way. But to do so from a party political stance when your own house is anything but in order is a bit off.

    Exasperation at the coalition for soaring bank bonuses is fair enough, but not if you fail to acknowledge that the Labour Party did the same and, had it won the election, would no doubt be doing the same now (i.e. precisely nothing).

  • jonathan

    It seems as if there is an insane obsession amongst bankers where their worth and status are measured by how much bonus they can give themselves. I may be wrong here but there seems to be no social contribution measure such as the banks contribution to GDP, that could balance this blatant greed.

  • Dave Citizen

    Jonathan, I think you’ve hit the nail on the head: there is no way of legitimating this blatant greed. It’s impossible for a person to work so much better or take so much bigger risks than say a soldier, that they ‘deserve’ such rewards.

    About all one can say is that, at the moment, we let them get away with it so they grab it while they can.

  • Leon Wolfson

    One good concept I heard proposed today is a bonus tax, with a rate based on the multiple over the lowest salary worker in the company.

  • Mr. Sensible

    So the outcome of project paper bag is complete double standards on the right…

  • Ed’s Talking Balls

    ‘double standards on the right’

    Please tell us all of the left’s courageous actions on banking excesses over the last decade or so, Mr. Sensible. We’re all ears…

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  • Mr. Sensible

    Ed, look, I have said several times on here that the previous government should have done more to regulate the financial system, along with every other major industrial economy.

    But what exactly is this one doing about it? No bonus restraint under Project Paper Bag (that name is more appropriate given what Lord Oakeshott said), no agreement on pay transparrency, and grose, not net, lending targets which are not being met. Osborne can give us all the rhetoric in the world about us all being in this together, but I, for one, simply don’t believe it.

  • Ed’s Talking Balls

    True enough, I can’t disagree with any of that. I was merely concerned that you were trying to make this a left-right issue, when quite clearly both parties were and are unwilling to address a rampant bonus culture. There’s no point pretending.

    And you are absolutely right, we are not “all in this together”. What a nonsense slogan.

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