BANKING BONUSES

City bankers who drove Britain into recession are due to pay out bigger bonuses than last year, a staggering £4BILLION. Britain has been crippled by the bank bailouts and struggling families will pay for years through higher taxes and spending cuts. The nation's debts could cost us a mind-boggling £1.3TRILLION if the financial system fails to recover.

Yet the bankers are back on the gravy-train as they shower top staff with bonuses of up to £60m each, double salaries so fat cats won't lose out and lavish traders with payments in shares to escape the threatened bonus curbs. This year's £4bn bonus payout, plus billions more in share handouts, is up from an estimated £3.3bn last year, according to top think-tank the Centre for Economics and Business Research (CEBR).

HSBC will disclose profits of £4bn and Barclays will reveal a £3bn windfall. Barclays is expected to reward staff with hundreds of millions of pounds in bonuses, the highest payout of all UK banks and HSBC is also likely to pay millions in bonuses. Even banks which swallowed up taxpayers' cash are gearing up for bumper handouts to staff.

RBS will bounce back with profits of £1.5bn, after its £20bn bailout and it is expected to pay out around £170m in bonuses. Staff are also in line for bumper share packages to be paid over the next three years. Unbelievably, RBS chief Stephen Hester will get a £9.7m pay perk if he performs well. Even Lloyds-TSB, which got a £17m bailout, will pay out tens of millions in bonuses. (Source: News of the World, Aug/09)

Banks are exploiting a tax loophole to dodge paying the government £80billion over the next 15 years. Even banks who were bailed out with billions of taxpayers' money are taking advantage of the ruse. Banks only pay tax on profits and do not have to shell out if they have made a loss but they can also set heavy losses against future tax payments, which means they may be able to avoid paying tax for decades because of just one bad year. Three bailed-out British banks, Lloyds TSB, Royal Bank of Scotland and HBOS, have revealed debts of £10bn.

This could enable them to write £2.5bn off their tax bills over the next three years. Only RBS has agreed not to offset its losses against future tax bills. A Treasury source confirmed the scam could cost the government as much as £80bn over the next decade. He said, "The trouble is that the system was designed when it was unthinkable that banks would make such staggering losses. We have tried to limit the damage with our own bailed out banks but cannot do anything about foreign banks which have not received state aid here."

Shadow Chancellor George Osborne, who uncovered the tax loophole, said, "We're all in this together and that includes the banks. Struggling British families would find it grossly unfair if the banks avoided paying their fair share to help fix Labour's debt crisis. We Conservatives won't let them escape their responsibilities." John McFall, chairman of the powerful House of Commons Treasury Select Committee, said, "At a time when tax revenue incomes for the government have fallen through the floor, this should not happen. It should be an opportunity to ensure the taxpayer gets something back for the gigantic multi-billion-pound bailout that propped these banks up last year." (Source: News of the World, Oct/09)

Bailed-out bankers will keep their bonuses despite the new supertax. Top investment banks are expected to dish out more than £40billion in salaries and bonuses in the next two weeks, barely a year after taxpayers had to rescue them. And most banks look set to pay the tax themselves rather than risk angering staff who would otherwise collect less than colleagues overseas. Chancellor Alistair Darling decided to cut bonuses with a 50% windfall tax on all payouts above £25,000.

City experts now believe the biggest banks will absorb the cost of the tax by increasing the bonus pools. That means big bills for London powerhouses including Goldman Sachs, Deutsche Bank, J P Morgan and Barclays. Many staff who escape the tax stand to get as much as they did before the Bank of England stepped into the financial crisis. The supertax could rake in more than £2billion, four times the £550million estimated by the Chancellor in his pre-Budget report but the Government will have failed to change the bonus culture in the City. (Source: Sunday People, Jan/10)