Banks' £7bn bonus pool condemned by unions

As ordinary Britons woke up to George Osborne's latest round of axe-swinging, the City simply shrugged its collective shoulders and got back to what it does best – feathering the bonus nests.

The Centre for Economics & Business Research (CEBR) will today forecast that London's financial elite will share £7bn in bonuses this year. That makes an average payout of £70,000, based on its estimate of 100,000 workers in London's financial sector. But with significant numbers of support staff contained within that figure, who receive little if anything, the actual average will be much higher.

The think tank – which bases its forecasts on actual financial results from financial companies together with official figures from the Office for National Statistics – also suggests the pool is going to grow and grow even as the cutbacks cause the amount of money in the wallets of the average worker to shrink.

Next year's pool is expected to reach £7.4bn, then £7.8bn in 2012, £8.8bn in 2013 and nearly £10bn in 2014. The 50 per cent top rate of tax does mean the state will, ultimately, benefit from the City's largesse.

But Brendan Barber, general secretary of the TUC, said: "There are many in the City still earning huge bonuses which raise concerns that the same old high-risk practices are at work. With City firms seemingly back to business as usual, more clearly needs to be done if we are to avoid a repeat of the 2008 crash."

Even George Osborne addressed the issue in his conference speech, warning of action on bonuses if banks fail to lend to small businesses. But if the CEBR's research is even close to the truth (and it's usually pretty reliable) their words appear to be falling on deaf ears. And, in reality, there's not much they can do about it.