Bankers’ bonuses were more than a hundred times higher than public sector workers over the past year and grew at double the rate of those of the average UK worker, official figures have showed.

The average bonus for bankers and insurance workers was £13,300 between May last year to April, while that of public sector workers such as nurses and teachers was the lowest at around £100 on average.  The figures are likely to prompt further calls for stricter rules on payouts for financial workers, especially in the face of a series of recent scandals including the rigging of Libor rate and amid stagnating real wages across the UK.

The European Union has enforced a cap on bankers’ bonuses this year to no more than double their salaries, but banks are escaping it by raising base pay and allowances – and the UK government has opposed it and is currently challenging it in the European Court of Justice.

Earlier this month Royal Bank of Scotland awarded Rory Cullinan, the boss of the ‘bad bank’ set up at the start of the year to manage some of the most toxic assets, £534,000 in shares for the first eight months of the year. 

In total RBS handed out £3.5million in the controversial new fixed ‘allowances’ to its top directors, although chief executive Ross McEwan has waived his allowance. RBS also handed a £1.9million ‘golden hello’ to its new finance chief Ewen Stevenson earlier this year.

Barclays caused anger after awarding shares worth £32million to a dozen executives, after announcing a 10 per cent hike in its bonus pool to £2.4billion, despite a 32 per cent fall in annual profits to £5.2billion.  TUC general secretary Frances O’Grady said the rise in bonus payments for bankers won’t help the vast majority of workers who don’t receive bonuses and are suffering a squeeze on their wages.  He said: ‘Better pay settlements for all staff, rather than bigger bonuses for a select few, are a far better way to spread the benefits of growth fairly throughout the economy.’

Total bonuses over the past year rose to 4.9 per cent to £40.5billion, of which £14.4billion was paid in the finance and insurance industry
This represents more than a third of all bonuses, although bankers make up just 4 per cent of the whole UK workforce.
Bonuses for the rest of the economy, which rose by 6.1 per cent to £26.1 billion, were the highest since records began in 2000-2001.
The mining and quarrying sector, including the oil industry, saw the second highest average bonuses at £7,000, while workers in the education, health and social sectors saw the lowest ‘negligible’ bonuses.
Public sector workers: Nurses, teachers and social workers saw the lowest bonuses at around £100

Janet Davies, executive director at the Royal College of Nursing, said the figures showing that bonus culture was alive and well were a ‘cold comfort’ to the thousands of nurses who ‘haven’t had a cost-of-living increase for five years’. ‘
‘No-one is denying that times have been tough and difficult decisions have had to be made but nurses have cared for record numbers of patients through the most disruptive reorganisation in NHS history and in the face of huge workforce cuts,’ she said.  And added: ‘With the economy recovering, it is now time for some fairness to be exercised, with better pay for all staff including nurses, midwives and healthcare assistants who deserve to be valued and appreciated for the vital work they do.’
Annual bonuses in the private sector increased 5.8 per cent to £39.1billion while in the public sector they fell 16.3 per cent to £1.3billion – partly as a result of the privatisation of Royal Mail.

Private sector average pay at £1,800 was 18 times that in the public sector excluding financial services, though private sector regular pay is lower than that in the public sector.  The ONS published figures from May to April as the fiscal year April to March was affected by an anomaly when many employees paid out bonuses in April 2013 to take advantage of tax changes.

The figures come as a recent study by the High Pay Centre showed that the average FTSE 100 chief executive was paid 143 times their average worker last year.  And recent data from the Office for National Statistics revealed that, including bonuses, weekly pay for the average worker fell by 0.2 per cent, its first decline since the recession in 2009.


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