Where has this 'mythical 5-piece that nobody's heard of' come from?
A band should be paid the rate for the job and £1,200 isn't a lot.
It's not about 'what the market can bear'. That's sheer materialism. Who decides what that is anyway?
Whether or not performing at gigs is their sole means of remuneration or not shouldn't come into it and it's highly intrusive to suggest that it does.