Unions attack bonuses as Cameron defends business cred

The government should end corporation tax relief on pay and bonuses worth more than £262,000 per year to raise £1.7bn for the public purse, the Trades Union Congress (TUC) has said.

The TUC launched its attack on pay worth more than ten times the average salary of £26,200 after a string of attacks on bonus culture.

Royal Bank of Scotland chief executive Stephen Hester gave up his £1m bonus after a public outcry over the issue, and today, Network Rail bosses between them gave up £20m in bonuses.

According to the TUC's report on bonuses, 81,000 people have incomes from employment of £262,000 in the UK, 29,000 of whom work in finance.

Ending corporation tax relief on earnings above this figure would raise £1.7bn per year to help pay off the national debt, the TUC said.

The report was published as David Cameron prepared to meet with his business advisory group today.

The group, which includes Justin King, chief executive of Sainsbury's Sam Laidlaw, chief executive of Centrica and Dick Olver, chairman of BAE Systems, is expected to voice criticism over what it sees as the government's "anti-business" agenda, the Telegraph reports.

Business leaders are understood to be upset by the government's stance in the row over Stephen Hester's bonus.

Although the government did not block Hester's bonus and confirmed it would not intervene in other banks' pay arrangements, senior Conservatives and business leaders have criticised the government's stance.

Martin Sorrell, chief executive of Wire and Plastic Products (WPP) and member of the business advisory group wrote in the Sunday Telegraph that Cameron's banker and bonus "bashing" was "not good for business".

Michael Spencer, former co-treasurer of the Conservatives, said the government allowed Hester to be "bullied out of his bonus".

Lord Wolfson, chief executive of Next, said the way in which Hester was "hung out to dry" has undermined the business community's trust in the government.