Published: 11 Oct 2011
Last Updated: 18 Jan 2013
With bonus season nearly upon us, it’s always interesting to get a take on how the City is feeling. And in a year when the economy’s truly up the spout, the views of those in the Square Mile can be so at odds with the rest of the populace as to resemble the outpourings of a remote tribe in an early anthropological study. True to form, it turns out that nearly half of bank staff expect their 2011 windfall to be larger than last year’s – even though the eurozone debt storm has pummelled bank share prices and helped push the world to the brink of another looming recession.
Never mind that official figures out tomorrow expect to show a backdrop of unemployment at a 17-year high of more than 2.5m. A survey of 533 bankers by recruitment website eFinancialCareers found that just 28% of respondees were expecting their bonus to drop. One in 10 expects their year-end payment to rise by a whopping 70% or more. Of course, we should note how such reports work in the favour of a company which makes its money out of recruiting folk to the City. Those bonuses are a tasty lure.
Yet it’s hardly as if they’re living in cloud cuckoo land. Think-tank the Centre for Economics and Social Research predicts that City firms will hand out bonuses totalling £7.2bn, up from £6.7bn last year. As you can imagine, that’s hardly had every corner of the populace popping the cork in celebration: ‘It makes you wonder what level of financial Armageddon is needed for bankers to not get a bonus,’ as TUC general secretary Brendan Barber put it.
Of course, Barber’s the type to give bankers a hard time whatever they’re up to. But big bonuses do become hard to defend when they get so out of sync with either performance or the rest of the economy. And we can imagine that Barber won’t be the only one out there sharpening the blade for the bankers, given the Occupy Wall Street protests already going on across the pond.
The case agains them gets worse too when you chuck in that other highly emotive issue: tax avoidance. Anti-poverty charity ActionAid has revealed the banking sector uses tax havens more heavily than any other UK industry. Between them the ‘big four’ lenders have 1,649 separate companies based in low-tax locations like the Cayman Islands and Switzerland. HSBC has a total of 556 subsidiaries in tax havens, following by Barclays, with taxpayer-controlled Lloyds having nearly 300 offshore offshoots, including 97 companies in the Channel Islands.
Avoiding tax while rewarding people with barely any relation to how much they’re actually doing is hardly a recipe for popularity. Then again, when’s that ever been a problem? They're still laughing all the way to the bonus bank – for now at least…
Never mind that official figures out tomorrow expect to show a backdrop of unemployment at a 17-year high of more than 2.5m. A survey of 533 bankers by recruitment website eFinancialCareers found that just 28% of respondees were expecting their bonus to drop. One in 10 expects their year-end payment to rise by a whopping 70% or more. Of course, we should note how such reports work in the favour of a company which makes its money out of recruiting folk to the City. Those bonuses are a tasty lure.
Yet it’s hardly as if they’re living in cloud cuckoo land. Think-tank the Centre for Economics and Social Research predicts that City firms will hand out bonuses totalling £7.2bn, up from £6.7bn last year. As you can imagine, that’s hardly had every corner of the populace popping the cork in celebration: ‘It makes you wonder what level of financial Armageddon is needed for bankers to not get a bonus,’ as TUC general secretary Brendan Barber put it.
Of course, Barber’s the type to give bankers a hard time whatever they’re up to. But big bonuses do become hard to defend when they get so out of sync with either performance or the rest of the economy. And we can imagine that Barber won’t be the only one out there sharpening the blade for the bankers, given the Occupy Wall Street protests already going on across the pond.
The case agains them gets worse too when you chuck in that other highly emotive issue: tax avoidance. Anti-poverty charity ActionAid has revealed the banking sector uses tax havens more heavily than any other UK industry. Between them the ‘big four’ lenders have 1,649 separate companies based in low-tax locations like the Cayman Islands and Switzerland. HSBC has a total of 556 subsidiaries in tax havens, following by Barclays, with taxpayer-controlled Lloyds having nearly 300 offshore offshoots, including 97 companies in the Channel Islands.
Avoiding tax while rewarding people with barely any relation to how much they’re actually doing is hardly a recipe for popularity. Then again, when’s that ever been a problem? They're still laughing all the way to the bonus bank – for now at least…
