Labour’s Treasury financial secretary Chris Leslie has called for an urgent review of bank taxation attacking the Government’s bank levy as “pathetically small”.
Speaking during a 12-hour marathon Commons debate on the finance bill last night, Leslie said the Government had missed an opportunity to put banks on a fair tax basis, adding that Labour’s bonus tax should be repeated.
He said: “We advocate a fairly urgent review of the general levels of bank taxation in this country. Today’s debate should provide an opportunity to seek proper redress for the crisis and ensure we put the banks on a fair tax basis, but that is not what the Government are seeking with this pathetically small bank levy proposal.”
Leslie says under the Government’s initial proposals, published in July, banks with more than £20bn of liabilities and assets would have paid the levy on all assets, leading to a yield of £3.9bn.
He says the Government “panicked” when it realised this would bring in £1.5bn more than the £2.4bn the Treasury expected to raise.
In November, the Treasury announced it will switch the threshold approach to a tax free allowance where banks will only pay the levy on assets over £20bn, which will reduce the yield to £2.6bn.
From 2012, the levy will be 0.078 per cent of banks’ balance sheets.
Leslie said: “We need to examine the rationale behind the rate chosen and understand why the Government moved from a threshold approach to triggering the bank levy, to a tax free allowance of a certain amount before which the banks would pay against the chargeable liabilities of the bank.”
MPs tweeted their frustration over the length of debate when the House did not rise until 4am.
Conservative MP for West Worcestershire Harriett Baldwin accused Labour MP’s of “filibustering”, while children’s minister and Conservative MP Tim Loughton poked fun at the pro-alternative vote argument that the system will make MPs work harder.
He tweeted: “Started in constituency at 7.30am, still voting in commons at 3.40am – clearly need AV to make MPs work harder and stop these part-time hours.”