Bank bonus pot drops to £7bn

The City financial sector was expected to get £7bn for 2010, down four per cent from last year, the Centre for Economics & Business Research (CEBR) said.

The CEBR consultancy said the drop reflected fewer people working in the City in the aftermath of the credit crisis.

The new 50 per cent top rate of income tax meant the Treasury would get around £4.1bn from those bonuses after factoring in national insurance contributions, the CEBR said.

"A whopping £7bn payout will be easier to stomach if the lion's share goes to the nation," CEBR economist Benjamin Williamson said.

Earlier this week, Chancellor George Osborne said he would not allow banks to pay huge bonuses if they did not do enough to make loans available for small businesses.