Liberal Democrats propose extra bank charge to help eliminate deficit
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Version 0 of 1. The Liberal Democrats will press for a supplementary charge on banks until 2017-18 to be announced in next month’s budget, Danny Alexander, the Treasury chief secretary has announced. The charge set at 8% would raise £1bn a year and remain in force until the mandate to eliminate the current deficit is met. The levy would remove the reductions in corporation tax on the banks since 2010 and would be additional to the existing bank levy. The proposal will be included in the Liberal Democrat manifesto for May’s general election if – as looks likely – the chancellor, George Osborne, is not persuaded to include it in the final budget of the parliament later this month. We have always insisted that the banks help fund repairing the economy Like the Conservatives, the Lib Dems are committed to a further £30bn of fiscal “consolidation” in the new parliament to clear the deficit in the public finances by 2017-18. But unlike the Tories – who say they would do it through a combination of spending and welfare cuts and a further clampdown of tax avoidance – the Lib Dems say they would seek to raise at least £8bn through additional taxes. Alexander said the banks had recovered sufficiently to make a contribution to deficit reduction on top of the existing bank levy. “Failings in the banking system were a major factor in the great crash of 2008. That is why we have always insisted that the banks help fund repairing the economy,” he said. “To that end, we introduced the bank levy, which is on track to raise £8bn in this parliament. With the final stage of deficit reduction requiring around £30bn of savings, it would be totally wrong for all of that to be found from cuts to public services as the Conservatives propose.” Chris Leslie, the shadow chief secretary to the Treasury, said: “Nobody will trust what the Lib Dems say after they broke their promises on tax by raising VAT on families while giving millionaires a huge tax cut. “Labour will introduce a tax on bank bonuses to pay for a jobs programme for young people. We’ll reverse this government’s £3bn-a-year tax cut for the top 1% of earners to help get the deficit down fairly.” |