...soft on the causes of bankers!The ConDem Government is predictably "going soft" on banks as it unveiled details of its £2.5bn banking levy.The proposed new tax, to be paid by up to 40 banks and building societies, will be 0.05 per cent of their global balance sheets in its first year. This is more than the initially proposed level of 0.04 per cent. In subsequent years it will be charged at 0.75 per cent, rather than the planned 0.7 per cent.
However, other aspects of the levy have been tweaked to make it easier on banks, which will also benefit from a steep cut in corporation tax planned by the Government. The number of liabilities that will be taxed have been cut while some – such as substantial deposits above the £50,000 guaranteed by the Financial Services Compensation Scheme, will be charged at half the rate.
Overall, the amount raised when the tax comes into full force is expected to remain at about £2.5bn. This has angered campaigners, who argue that it is not enough given the £1,000bn of taxpayers' money spent on propping up the sector.
David Hillman, a spokesman for the Robin Hood Tax campaign said: "The Treasury says the £2.5bn bank levy is a 'fair contribution'. Yet in the new year, when bankers will be paying themselves tens of billions of pounds in bonuses, the rise in VAT will be hitting the poorest hardest. That does not look like a 'fair contribution' to most people.
"Having received more than £1trillion in public bailout money, the banks can afford to pay an extra £2bn a year which could protect the poorest at home and abroad. The case is clear – the banks can pay more and the Government must get serious about its commitment to fairness."
The TUC general-secretary, Brendan Barber, agreed, saying: "With all eyes on the tuition fee vote, the Government's spin machine is trying to bury the unpopular news that they are going soft on an already puny bank levy. But while banks benefit from corporation tax cuts and go back to paying huge bonuses, the rest of us are facing cuts in vital services and a VAT hike – the most unfair tax of all. Yet ministers still have the cheek to say their policies are fair."
