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08/02/2011
Banks Levy Aims To Raise £800m In 'Fair Contribution'
Chancellor George Osborne hopes to raise an extra £800m for the Treasury by increasing the levy on banks' profits this year.
He said the move will aim to raise £2.5bn in future years as "banks make a fair contribution to closing the deficit".
However the Chancellor stated in a radio interview that the coalition had not struck a deal on limiting bankers' bonuses.
Mr Osborne denied his actions were politically motivated and said: "The measure we have just announced means there's an extra £800m coming in to the Treasury this year.
"What I have announced is a permanent tax on banks, every year banks contributing £2.5bn net."
He added: "I'm still confident we can secure a deal with the banks on seeing an increase in lending to small businesses and see that bonuses are lower this year."
The levy was planned to be phased in, however the Chancellor agreed to move faster.
Commenting on the frustration people felt over bankers' bonuses, he responded: "I totally understand that anger and I share some of their frustration.
"It would have been better if, when we were bailing the banks out, we had secured something from the banks in return. Unfortunately I was not Chancellor at the time."
Ed Balls, Shadow Chancellor responded to the move: "After all George Osborne's tough talk on the banks in recent weeks and months, this morning's hurried and panicky announcement is a damp squib.
"While we welcome the fact that George Osborne has listened to our calls to raise more from the banks this year his announcement today does not go far enough.
"If George Osborne was serious he would adopt Labour's plan to repeat last year's £3.5 bn bank bonus tax on top of the bank levy.
"With the economic recovery stalling we would use the money raised to help create the jobs and growth we badly need this year.
"Without this bank bonus tax - and with the banks set to benefit from a corporation tax cut - George Osborne has actually delivered a tax cut for the banks compared to last year, even after today's announcement."
(BMcN/GK)
He said the move will aim to raise £2.5bn in future years as "banks make a fair contribution to closing the deficit".
However the Chancellor stated in a radio interview that the coalition had not struck a deal on limiting bankers' bonuses.
Mr Osborne denied his actions were politically motivated and said: "The measure we have just announced means there's an extra £800m coming in to the Treasury this year.
"What I have announced is a permanent tax on banks, every year banks contributing £2.5bn net."
He added: "I'm still confident we can secure a deal with the banks on seeing an increase in lending to small businesses and see that bonuses are lower this year."
The levy was planned to be phased in, however the Chancellor agreed to move faster.
Commenting on the frustration people felt over bankers' bonuses, he responded: "I totally understand that anger and I share some of their frustration.
"It would have been better if, when we were bailing the banks out, we had secured something from the banks in return. Unfortunately I was not Chancellor at the time."
Ed Balls, Shadow Chancellor responded to the move: "After all George Osborne's tough talk on the banks in recent weeks and months, this morning's hurried and panicky announcement is a damp squib.
"While we welcome the fact that George Osborne has listened to our calls to raise more from the banks this year his announcement today does not go far enough.
"If George Osborne was serious he would adopt Labour's plan to repeat last year's £3.5 bn bank bonus tax on top of the bank levy.
"With the economic recovery stalling we would use the money raised to help create the jobs and growth we badly need this year.
"Without this bank bonus tax - and with the banks set to benefit from a corporation tax cut - George Osborne has actually delivered a tax cut for the banks compared to last year, even after today's announcement."
(BMcN/GK)
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