Labour has attacked the Government’s bank levy for raising £1.1bn less revenue in the last year than originally planned, claiming it needs to be redesigned.
In a finance bill debate last week, shadow Treasury financial secretary Chris Leslie said chancellor George Osborne had been “tremendously generous” to banks.
The Government targeted annual revenue of £2.5bn from the bank levy when it was introduced in 2010, but in 2012/13 it raised £1.6bn. Leslie includes the effect of a corporation tax cut that saved banks £200m, creating a £1.1bn shortfall.
In 2011/12, the Government raised £1.8bn and when including the corporation tax cut it amounted to £800m less revenue than planned.
Leslie said: “The Government’s bank levy has raised far less than the £2.5bn promised. In the financial year just ended—2012-13—the bank levy raised just £1.6bn, from which a further £200m has to be deducted because of the generosity of the corporation tax cut that the chancellor has lavished on the banks.
“All in all, the banks have paid £1.1bn less than they were supposed to pay in the last financial year. This is a tremendously generous chancellor, but only to the banks.”
Leslie said one option is to increase the levy but added the Government needs to go “back to the drawing board” to redesign the tax and make sure it works.
He also reiterated Labour’s calls for a repeat of the tax on bankers’ bonuses made in 2009, claiming it would raise £2bn a year.