Holyrood’s economy committee is right to raise concerns about the “massive inequality” in pay in the financial sector – bankers in Scotland often earn a fraction of those in London and the stigma attached to working in the industry is prompting many to look elsewhere.
Much has been made of the economy committee’s letter to George Osbourne, calling for a need to pare back large banker bonuses.
The committee’s sentiment – that the large pay for senior bankers is at odds with the “disproportionate effect of the banking crisis on lower paid employees in terms of pay freezes and job losses” – could be seen as acting in the interest of the banking sector north of the border.
Aside from the swathes of corporate bankers cut from RBS and Lloyds at the height of the crisis, ongoing redundancy announcements and reorganisations have hit rank-and-file staff hard.
What’s more, while the public equates bankers with hefty pay packets, RBS salaries in Scotland come in at an average of 30.5k, while Lloyds pays an average of 28k – figures which pale in comparison to investment banking packages in London. The median salary north of the border is 25.2k.
Not surprisingly, a certain amount of disillusionment has set in. We’ve pointed to people switching industries previously, whether that’s moving to a charity or starting their own business, but even financial crisis survivors are weighing up their options.
One senior corporate banker working for a mid-sized bank in Edinburgh, says there’s been a “brain drain” from the sector over the last couple of years, which is showing no signs of abating.
“Firstly, there’s the fact that it’s increasingly difficult to do your job due to internal restrictions and lack of appetite for loans from customers,” he says. “Then, it’s about your person career – many people have been treading water for some time and thinking that if a senior position doesn’t materialise soon, it’s time to do something else.”