George Osborne is taking on Europe to defend bankers’ bonuses (Picture: PA)

Taxpayers are to foot a £1million legal bill so George Osborne can go into battle with Brussels to defend bankers’ mega-bonuses.

The public will have to pay for £700-an-hour lawyers to argue in court that the people widely blamed for wrecking the economy should hang on to their multi-million pound payouts.

The chancellor has filed a complaint against the European Union over its plans to cap bonuses, claiming the move will drive up bankers’ basic salaries.

If it ends up in the courts, the government will need to use external and in-house lawyers to make its case.


International litigation lawyer Mark Stephens said: ‘It will cost a bankers’ bonus to take the case to Europe.



‘It will cost about £1million – maybe not a top bankers’ bonus, which was tens of millions – but a lot.

‘They will, no doubt, use lawyers from a top firm, where lawyers cost £700 to £800 an hour, and we are looking at many hours work.’

Taxpayers will foot the legal bill (Picture: Reuters)

Simon Chouffot, from the Robin Hood Tax campaign, said: ‘It is outrageous but this is a government with misplaced priorities, who look out for their friends. It is beyond belief that George Osborne is battling for bankers’ bonuses when he should be fighting for Britain’s best interests.’

Under the EU’s proposed rules, which could be applied from next year, bonuses would be capped at a maximum of 200 per cent of fixed pay.

Mr Osborne warns this could push bankers’ fixed pay ‘up rather than down’, and he believes Brussels has gone beyond its remit in seeking to regulate bonuses, saying the idea has been agreed without proper consultation or impact assessment.

In April this year, £1.3billion was paid in bonuses in the finance and insurance sector as recipients deferred taking them the year before to dodge the 50p top rate of tax on earnings of more than £150,000.

Critics point out that the taxpayer has already bailed out failing banks to the tune of £1.162trillion.

But a government source said: ‘We have led the way in clamping down on irresponsible pay in this sector, limiting upfront cash payments, linking other rewards to long-term performance and introducing the ability to claw back bonuses that have already been paid.

‘But these European plans could have the opposite effect by just pushing up basic salaries, which are much harder to claw back. This is best sorted at a UK, not EU level.’