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| City 'will be hurt by bonus tax' | City 'will be hurt by bonus tax' |
| (about 2 hours later) | |
| London's role as a leading financial hub may be "damaged" by the new bonus tax, Barclays chief John Varley has told the BBC. | |
| Mr Varley is the first senior British banker to attack the one-off 50% tax on large bonuses for bankers recently announced by the government. | Mr Varley is the first senior British banker to attack the one-off 50% tax on large bonuses for bankers recently announced by the government. |
| "I think that London could well be damaged by this," he said. | "I think that London could well be damaged by this," he said. |
| The Barclays chief executive also criticised Labour for not ensuring a "predictable tax environment". | The Barclays chief executive also criticised Labour for not ensuring a "predictable tax environment". |
| The bonus levy applies to bonuses of more than £25,000, and lasts until April next year. France has announced similar plans. | The bonus levy applies to bonuses of more than £25,000, and lasts until April next year. France has announced similar plans. |
| The tax is payable by banks, with bankers still having to pay income tax on any bonus they receive as usual. | The tax is payable by banks, with bankers still having to pay income tax on any bonus they receive as usual. |
| Mr Darling predicted in his pre-Budget report that the tax would raise £550m, though banks have claimed it would raise far more. | Mr Darling predicted in his pre-Budget report that the tax would raise £550m, though banks have claimed it would raise far more. |
| 'Laments' bonus tax | 'Laments' bonus tax |
| "Banks are competing globally - this bank, Barclays, competes with banks all around the world and we have to be able to compete on a level playing field," Mr Varley told the BBC. | "Banks are competing globally - this bank, Barclays, competes with banks all around the world and we have to be able to compete on a level playing field," Mr Varley told the BBC. |
| "The United Kingdom and France have gone in that direction (the bonus tax) and I lament that," he added. | "The United Kingdom and France have gone in that direction (the bonus tax) and I lament that," he added. |
| I understand the anxiety in the public and in stakeholders in this country about pay in the banking industry John Varley | I understand the anxiety in the public and in stakeholders in this country about pay in the banking industry John Varley |
| The Treasury, in a response to Mr Varley, said it stands by its decision to have a tax. | The Treasury, in a response to Mr Varley, said it stands by its decision to have a tax. |
| "The government does not believe the long-term competitiveness of the UK financial services sector will be harmed by this one-off tax," a Treasury spokesman said. | "The government does not believe the long-term competitiveness of the UK financial services sector will be harmed by this one-off tax," a Treasury spokesman said. |
| "Without the significant support that the taxpayer has provided over the last year, some of the banks would have failed, damaging the economy further. | "Without the significant support that the taxpayer has provided over the last year, some of the banks would have failed, damaging the economy further. |
| "The bonus tax will ensure banks think twice before paying large bonuses on the back of taxpayer support. | "The bonus tax will ensure banks think twice before paying large bonuses on the back of taxpayer support. |
| Mr Varley also criticised the government for the changes it had made to the tax system. | Mr Varley also criticised the government for the changes it had made to the tax system. |
| In addition to the bonus tax, Mr Darling has implemented a new higher tax rate of 50% that will be applied to incomes over £150,000 a year from April 2010, and high-earners will be taxed on the value of their employers' pension contributions. | In addition to the bonus tax, Mr Darling has implemented a new higher tax rate of 50% that will be applied to incomes over £150,000 a year from April 2010, and high-earners will be taxed on the value of their employers' pension contributions. |
| "It is very important that for this economy we have a predictable tax environment, not just for this tax but for all taxes," Mr Varley said. | "It is very important that for this economy we have a predictable tax environment, not just for this tax but for all taxes," Mr Varley said. |
| "And what business needs and households need is a stable and predictable tax environment and I think that this (the bonus tax) is a demonstration of a lack of stability in the tax environment." | "And what business needs and households need is a stable and predictable tax environment and I think that this (the bonus tax) is a demonstration of a lack of stability in the tax environment." |
| Shadow chancellor George Osborne has said he does not oppose the bonus tax, but Conservative London Mayor Boris Johnson has warned the tax would "super-penalise" the city. | Shadow chancellor George Osborne has said he does not oppose the bonus tax, but Conservative London Mayor Boris Johnson has warned the tax would "super-penalise" the city. |
| Competitiveness concerns | Competitiveness concerns |
| Unlike rivals Royal Bank of Scotland and Lloyds Banking Group, Barclays avoided seeking a bail-out from the UK government in the midst of the financial crisis last year. | Unlike rivals Royal Bank of Scotland and Lloyds Banking Group, Barclays avoided seeking a bail-out from the UK government in the midst of the financial crisis last year. |
| It instead raised money from the Middle East, though it still benefited from emergency lending measures from the Bank of England to restore confidence to the credit markets. | It instead raised money from the Middle East, though it still benefited from emergency lending measures from the Bank of England to restore confidence to the credit markets. |
| Mr Varley is the first head of a bank to hit out at the bonus tax | Mr Varley is the first head of a bank to hit out at the bonus tax |
| Mr Varley acknowledged the banking industry's debt to the taxpayer. | Mr Varley acknowledged the banking industry's debt to the taxpayer. |
| "I know that as a system we had state support when we were on the brink of collapse and we need to acknowledge that in our behaviour," he said. | "I know that as a system we had state support when we were on the brink of collapse and we need to acknowledge that in our behaviour," he said. |
| "I understand the anxiety in the public and in stakeholders in this country about pay in the banking industry. | "I understand the anxiety in the public and in stakeholders in this country about pay in the banking industry. |
| "But I also have a responsibility to our shareholders, and in the modern banking environment, talent is mobile. So unless I get the best people I will not be doing my duty to my shareholders. | "But I also have a responsibility to our shareholders, and in the modern banking environment, talent is mobile. So unless I get the best people I will not be doing my duty to my shareholders. |
| "We need a level playing field to make sure that we can compete with the best companies in the world," he added. | "We need a level playing field to make sure that we can compete with the best companies in the world," he added. |
| He said it was important that the financial services sector stayed competitive because it employs 1.3 million people, generates 15% of corporation tax contributed to the Treasury's coffers, and accounts for 10% of the total output of the UK economy. | He said it was important that the financial services sector stayed competitive because it employs 1.3 million people, generates 15% of corporation tax contributed to the Treasury's coffers, and accounts for 10% of the total output of the UK economy. |
| Barclays said recently it made a pre-tax profit of £1.56bn in the three months to 30 September. | Barclays said recently it made a pre-tax profit of £1.56bn in the three months to 30 September. |