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PBR: Bonus tax makes London less attractive to global banks, says BBA

The British Bankers’ Association says the Chancellor Alistair Darlings plans for a 50 per cent levy on bonuses over £25,000 will make London less attractive to international banks.

The Chancellor Alistair Darling announced the measure in his pre-Budget speech today.

BBA chief executive, Angela Knight says: ” The Chancellor’s comments on bonuses were well trailed and we now await the details.

“This new tax has to be set in the context of commitments already made. The UK’s banks have already agreed to observe pay restraints where bonuses are mostly deferred and paid in shares. We are already well ahead of the other G20 countries in doing this.”

She adds: “Viewed from abroad, those foreign banks which reward their UK staff with contractually-agreed bonuses are likely to be the hardest hit. London may well look to them now like a significantly less attractive place to build a business.

“We must repeat that only concerted international agreements will succeed in reforming remuneration in the financial sector.”

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