Christmas is coming, the City's getting fat

Festive bonuses will create 100 millionaires in London, but most workers have forgotten they ever received one

So them that hath shall be given. Never is that truth more evident than at Christmas, when the already stratospherically well-paid money movers of the City will be sharing out bonuses that could total as much as £1bn. The rich man in his castle, indeed.

So them that hath shall be given. Never is that truth more evident than at Christmas, when the already stratospherically well-paid money movers of the City will be sharing out bonuses that could total as much as £1bn. The rich man in his castle, indeed.

And what of the poor man at his gate? It will not be a particularly merry Christmas for 2,200 Vauxhall workers in Luton, who learnt last week that they will lose their jobs by 2002. Their impotent fury at a decision taken thousands of miles away, at the General Motors headquarters in Detroit, was expended on the local administrative building, which was besieged by two groups of marchers in one day.

The Vauxhall employees were victims of globalisation, a trend that has widened the gap between those at the top of the pay and bonus scale and those at the bottom. If you can ride the wave of global competition, the rewards can be fabulous, as up to 100 new millionaires in the City will be finding out this Christmas.

Evidence about the size of bonuses in the financial world is anecdotal, since companies are not obliged to declare them in their accounts, but a lucky few will be getting much more than £1m - up to £20m at the top. "The markets are not looking too good at the moment, but these people will be reaping the benefit of the surge earlier in the year," one analyst explains.

At the other end of the scale, Christmas bonuses are becoming a thing of the past. According to the independent organisation Labour Research, a third of employers already give their workforce nothing at all. A fifth hand out gifts such as turkeys, wine or chocolate, and only a tenth of employees get anything extra in their pay packet. In most cases the only perk at Christmas is a staff lunch or party - and even then a third of companies make their workers pay for the privilege.

Directors of the same companies, meanwhile, are doing better than ever. "Our annual survey of quoted companies shows directors' pay rose over 21 per cent in the last period, twice the rate of the previous 12 months," says Neal Moister of Labour Research magazine. "A record number, 470, earn £500,000 or more, including 138 on £1m plus."

Executive share options are also skyrocketing: a survey by William M Mercer, a human resources and employee benefits consultancy, showed that companies in the FT-SE 100 were planning to increase options granted to top executives by more than double. Some stood to receive in excess of 20 times their salary. "Momentum has been building up, with companies coming under pressure to compete in the global market, particularly against US packages," says the consultancy's Richard Lamptey.

There's that word again - global. What it seems to stand for is more than mere cash. The happy few on the inside have access as never before to benefits, services and favours, while those on the outside, such as the Vauxhall workers, cannot even confront the people who have power over their lives.

Take the investment bank Goldman Sachs, legendary even by City standards for the lavishness of its end-of-year bonuses. Square Mile hands reckon several dozen of its London staff will be banking £1m or more, but the company has also introduced a "concierge" service for all its employees. Booking tickets, sorting out a plumber, collecting the dry-cleaning: the lowliest secretary or researcher at the bank can have it all done for them. In the process, they can experience how it is to be the kind of "decision maker" or "opinion former" who takes this sort of thing for granted.

At Christmas this class is the target of even more largesse than at the rest of the year. The funds that might once have gone into seasonal benefits for employees will be spent on gifts for suppliers, customers and anyone else thought to be in a position to benefit the company. (Journalists, it has to be admitted, fall into this category; among the goodies received by one men's magazine editor this year was a pair of Prada skis and a Gucci wastepaper basket. And instead of going to a small claims court over problems with goods or services, they would simply browbeat the supplier's public relations department.)

Showering influential people indiscriminately with presents can seem counter-productive, however, even crude - witness the Harrods boss Mohamed Al Fayed and his unsolicited gifts of hampers to journalists and MPs. But while this kind of corporate giving will never stop, a public relations veteran, Will Whitehorn, believes it is going out of fashion.

"What is new in the past 10 years," says Mr Whitehorn, chief spokesman for Richard Branson's Virgin group, "is the money and effort that has gone into trying to associate celebrities with your company or product - not simply paying them to do an ad, as we did with Helen Mirren, but giving them things in the hope that they will mention them or be photographed with them. It all started in the US a long time ago - Ronald Reagan was given free Chesterfield cigarettes for life after endorsing them in the 1950s."

While certain celebs are notorious among the in-crowd for demanding free clothes, tickets and hotel rooms, those outside only occasionally glimpse this freebie culture, as when Tara Palmer-Tomkinson disclosed that she had been given the use of one of the new Volkswagen Beetles, or when Victoria Beckham revealed that she gets enough free make-up to sink a battleship. Car companies are particularly keen to get stars into their product: the Newcastle and former England footballer Alan Shearer, for example, has a free Jaguar.

Mr Whitehorn thinks the Vauxhall workers should be aggrieved that their management was not more successful in this respect. "How many celebrities have you ever seen with a Vauxhall?" he asks. "The company has good-quality products, but they are not well marketed."

For Frank Furedi, reader in sociology at the University of Kent, there is a wider message. "I have no problem with some people getting fat bonuses at Christmas," he says, "but I do with New Labour's talk of 'inclusion' and 'exclusion'. These buzzwords have nothing to do with wealth redistribution or having access to resources, they are simply concerned with making people feel better about themselves."

The farmers' and lorry drivers' blockade, like the scenes in Luton, showed the frustration of people who sensed that they were being shut out, says Dr Furedi. He adds: "What astonished me was the intolerant reaction of many of my friends who consider themselves left-wing. They regarded the fuel price protesters as the scum of the earth. This government's policies are no different to those of the Tories. It is simply the rhetoric that has changed."

As an academic, Dr Furedi agrees that he is on the inside. When his five-year-old son needed urgent dental treatment for which the local hospital had a two-week waiting list, he was able to phone around and use his wife's NHS contacts until he found a clinic that could take the boy straight away.

"I was all too aware that people without my connections would have had to watch their child in pain for a fortnight," he says. "You may say that it's always been like that, but now society is far more polarised."