Barclays investment bankers in line for 150% pay rises to ease bonus tax pain

Bankers at Barclays are being given massive pay rises to compensate for the 50 per cent bonus tax.

Up to 23,000 investment bankers have been awarded rises of as much as 150 per cent - apparently planned before the bonus tax was announced in Alastair Darling's Pre-Budget report.

Barclays president, Bob Diamond, has led the bank during its takeover of Lehman Brothers' New York operations, and points out it has not received Government bailout cash, unlike rivals Lloyds and RBS.

Softening the blow: The bank, led by John Varley, can save money by shifting staff pay to salary rather than bonuses

Barclays Capital should have a much larger bonus pool to share out this year on the back of plentiful highly lucrative rights issues.

The main beneficiaries are likely to be middle ranking and junior staff, whose salary caps have been lifted. Big-deal bankers who will earn seven figure bonuses will benefit less from a rise in basic pay.

The bank itself should benefit as it will pay less in tax overall - as the bonus tax is paid by the bank, not the individuals.