Cable proposes 10% levy on bank profits
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Vince Cable, shadow chancellor for the Liberal Democrats, has proposed creating a new levy on bank profits at a rate of 10%.
All the revenue raised, estimated next year to be around £2bn, would go towards tackling the structural deficit in the UK economy.
Cable says that current estimates by the Bank of England show UK banks to have borrowed £1 trillion in taxpayer support.
Until the banks can be successfully broken up, the Lib Dems believe that they should pay for the explicit guarantee that they receive.
Cable says: “£1 trillion worth of taxpayer support has gone into keeping the British banking industry afloat.
“We must find a way to split the banks so that the British public no longer props up ‘casino’ banking.
“Meanwhile, it is only right for the taxpayer to get a fair deal for the guarantee that they provide to the banking industry.”
He adds: “A 10% levy on bank profits would be used to pay down the structural deficit that they are partly responsible for creating.
“The government should use next month’s pre-Budget report to put forward this proposal so that banks recognise the explicit guarantee that they currently enjoy.”
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Readers' comments (2)
Dan McGeehan | 17 Nov 2009 12:08 pm
Looks great on paper however if the banks need to pay more out this could lead to costs rising elsewhere. Taxpayer's could have higher rates on borrowing and costs added elsewhere.
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Anonymous | 17 Nov 2009 1:47 pm
It's about time the Government actually levied a windfall tax on these banks profits. Also I think anyone who is earning in excess of £175k p/a should have to pay a special "Ressession tax levy " of 75% on anything over £125k ! It might centre their minds a little ? Mr Brown take the gloves off and install this arrangement THIS YEAR before its too late!! The "British People" would thank you for this one.
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