Bonuses paid out by banks and insurers since the start of the financial crisis are set to top £100bn this year, according to the Robin Hood Tax campaign.
As this year’s bonus season is in full swing, the campaigners analysed data from the Office for National Statistics. It shows that bonuses paid out in the financial sector have reached £91bn since October 2007. This figure is likely to exceed £100bn by the end of March, the end of the financial year.
This equates to £1,500 for every man, woman and child in the UK. Last year, Britain’s financial sector paid out £15bn in bonuses. A small number of investment bankers earn more in a year than most people do in a lifetime.
David Hillman of the Robin Hood Tax campaign, a group of 119 UK organisations including Barnardo’s, Comic Relief, Oxfam, Friends of the Earth, Stamp Out Poverty and the TUC, said: “This eye-popping sum is evidence we live in a two-tier Britain where an unreformed financial sector continues to pocket huge rewards while the rest of us are left to clear up their mess.
“We’ve given the Square Mile far too long a leash – the result has been a sector that feathers its own nest despite being embroiled in one scandal after another. Our softly-softly approach to the City clearly has not worked – it’s time we tackled this bloated sector by ensuring they pay more tax.”
High street banks are about to reveal their bonus pots for 2014, starting with HSBC on Monday, followed by bailed-out banks Royal Bank of Scotland and Lloyds Banking Group at the end of the week. Barclays and Standard Chartered report the week after.
Barclays is expected to have cut its total payout to below £2bn from £2.4bn the previous year and the bailed-out banks are also likely to announce smaller bonus pools.
The financial sector makes up about a 10th of the UK economy, but accounts for well over a third of all bonuses paid out. (Bonuses totalled £241bn across the economy between 2007 and 2014.)
Banks have found ways to sidestep the cap on bonuses imposed by Brussels that took effect at the start of 2014, by handing out “fixed pay allowances” in shares or extra cash payments.
The Robin Hood Tax campaign is calling on the UK to introduce a financial transactions tax that will both raise revenue and curb some of the sector’s worst excesses.
Ten eurozone countries renewed their commitment to introducing a tax on financial transactions following meetings in Brussels last month. After talks broke down late last year over the taxation of derivatives and whether the tax would pay for the cost of collecting it in smaller countries, the group asked the European commission for technical advice.
The UK has opposed the tax, arguing that it would damage the City of London.