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Fat cats getting fatter? Bankers’ bonus culture lives on as millionaires’ club tops 2,700

Figure is 12 times more than any other country in the EU

The number of UK bankers earning at least €1m (£833,200) rose to more than 2,700 last year, in a new City pay explosion.

The figure is 12 times more than any other country in the EU, underlining London’s dominance as Europe’s financial centre.

The total rose by 11 per cent despite strenuous government efforts to curb the damaging “bonus culture”.

The figures, from the European Banking Authority, show thousands of London finance workers still measure their pay and bonuses in millions, five years after the banking crisis that triggered a devastating global recession.

They are likely to renew the row over “unjustifiable” City rewards at a time when millions of workers are seeing their salaries fall in real terms.

Across the EU, 3,529 bankers were paid more than €1m of which 2,714 were from the UK. The average for bankers in this category was €2m (£1.6m).

The figures highlight the clash that British banks will face when new European rules come into force next year limiting bankers’ bonuses to twice their pay.

The rules apply to anyone in banking earning more than €500,000 and are expected to affect as many as 10,000 people in the City of London.

Bonuses among the highest earners in today’s survey were almost four times their base salary on average.

London-based banks have been pushing up base salaries and monthly allowances in order to retain key staff ahead of a year when their bonuses could be cut.

Of the British bankers earning more than €1m, 2,188 worked in investment banking, 62 were in retail banking, 198 were in fund management and 266 were in other areas.

The European watchdog said that only 212 bankers in Germany earned more than €1m, up by a quarter from 2011.

A total of 177 bankers were similarly well rewarded in France and 109 in Italy.

“Self-regulation does not work and the report illustrates why the European Parliament took the unprecedented step of inserting a hard bonus cap in the absence of action by the industry,” Arlene McCarthy, Labour MEP for North-west England, told Bloomberg.

The Chancellor George Osborne has filed a formal complaint against Brussels over the bonus cap plans amid fears the move will backfire and drive up salaries.

The Treasury began legal action in September, arguing the EU had gone beyond its remit in seeking to regulate bonuses, which it claims had been decided without proper consultation and with no impact assessment.

But banks are understood to be planning to sidestep the rules by handing out monthly payments to affected staff.

According to the Office for National Statistics, the average weekly bonus in the financial sector was £143 in April – a rise of 64.4 per cent compared with April 2012.

The dramatic rise came against a background of falls in bonuses over the last year, suggesting recipients had been delaying collecting until the Government’s cut in the top rate of income tax came into effect in April.