CSR: Banks slapped with permanent levy

Sarah Davidson

October 20, 2010

He said: “I completely understand people’s anger that the banks which were appallingly regulated over the past decade and wrought such damage to our economy should now be contemplating paying bonuses.”

The coalition is introducing a permanent levy on banks to try to appease the public anger, as well as Osborne announcing a deadline of the end of next month for banks to sign the voluntary code of practice introduced under Labour.

Only four out of the fifteen major banks in the UK have already signed the agreement.

However, he added: “I neither want to let banks off making a fair contribution nor drive them abroad.”

With this in mind, Osborne said the government aim was to extract the maximum sustainable revenue from financial services that would achieve this balance.

But he added: “The permanent levy will raise more net each year than the one off bonus tax.”

The British Bankers’ Association said: “Banks fully understand they have a role to play in the UK’s economic recovery.

“The permanent levy on banks was previously announced and was, therefore, not unexpected. ]

“We clearly need to see the full detail of today’s announcements to be able to assess their impact on the UK banking sector and our attractiveness as a global financial centre.

“Decisions taken today will have an effect on the whole industry and to remain competitive UK policies need to be in step with those elsewhere.

“Financial services currently contribute around £24 billion in taxes every year so we are pleased the Chancellor said he wishes to balance taxation with the attractiveness of the UK as a global financial centre and the need to retain jobs. “

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