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LibDems target £1bn bank levy in final Coalition Budget

The Liberal Democrats are pushing for reforms to raise an extra £1bn from banks to be included in the final Coalition Budget later this month.

The party wants to generate the money through a “supplementary corporation tax charge” on lenders of 8 per cent.

“This will effectively remove the series of corporation tax reductions introduced since 2010 from the banks,” the LibDems claim.

Treasury chief secretary Danny Alexander says: “Failings in the banking system were a major factor in the great crash of 2008.  That is why we have always insisted that the banks help fund repairing the economy.  

“To that end, we introduced the Bank Levy which is on track to raise £8bn in this Parliament.

“With the final stage of deficit reduction requiring around £30bn of savings, it would be totally wrong for all of that to be found from cuts to public services as the Conservatives propose.

“Liberal Democrats believe that we must balance the books and do so fairly, so it is only right to reconsider whether banks are making a fair contribution to deficit reduction. This tax would remain in place until that job is complete.”

Alexander argues banks should pay the additional levy because they have benefited from a combination of Government reforms and improvements in the economy.

He says: “Many banks were left seriously weakened after the crash.  But as a result of our comprehensive range of reforms, and the strong economic recovery, the banking sector is now returning to health and profitability.

“So now is the right time to ask the sector to contribute a little more to help us balance the nation’s books. That’s the right way to keep our strong economy on track, and build a fairer society too.”

The British Bankers Association has attacked the plans, however.

A BBA spokesman says: “Banks in the UK already pay more tax than any other industry. The tens of billions of pounds the banking sector pays each year make a major contribution to funding schools and hospitals across the country.

“Introducing yet another tax on banks will not improve financial stability.”

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Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. I actually like Danny Alexander, I think he’s a very clever guy. This announcement is not the output of a very clever guy. It’s not even the output of a very political guy. The banks have been the target of taxes and fines for the last 6 years because they tend to pay up without complaining.

    For avoidance of doubt the financial crisis was caused by people borrowing money that they could not pay back egged on by the US government and the knock effect of banks stopping lending to those that could. The characterisation of all banks being responsible simply because they lend money is as best disingenuous.

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