Barclays' bonus decision puts pressure on rival banks

Barclays set the bar for the rest of the UK's banks today. Not just on its strong figures but also on its remuneration policy.

The killer blow, of course, was John Varley and Bob Diamond's decision to turn down bonuses which would have been approaching £10 million.

That puts pressure on Lloyds and RBS bosses when they report next week. Will Eric Daniels and Stephen Hester forgo their pay-outs?

But the decision to pay out a lower proportion of Barclay Capital's profits in bonuses also adds to the pressure on its rivals.

Barclays chairman Marcus Agius is right when he says: "We will be judged by how we lend and how we pay."

The bank has shown some restraint. But that is as much to divert cash away from bonuses to strengthen its balance sheet as it is a public relations exercise.

Barclays has paid £225 million in the one-off bankers' bonus tax, almost all of which comes out of senior employees' pockets.

The fact that this sum is exactly half what Alistair Darling forecast the tax would raise in total back in December means that could now be as much as £3 billion.

This may be a very handy windfall for the Treasury but it actually means that as a deterrent to paying big bonuses the Chancellor's tax has spectacularly failed.