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2 Mar 2015 02:27pm

Lib Dems propose £1bn bank tax

The party will urge George Osborne to levy banks with the additional tax in his upcoming Budget

Chief secretary to the Treasury Danny Alexander has proposed that the annual levy on British banks is increased from £2.5bn per year to £3.5bn to help erase the deficit.

Now is the right time to ask the sector to contribute a little more to help us balance the nation's books

Danny Alexander

The Liberal Democrats want to impose an additional 8% rate of corporation tax. It says the supplementary charge will raise an extra £1bn and would remove the reductions in corporation tax on the banks since 2010.

Alexander will push the chancellor to include it his Budget on March 18, or it will form part of the party's economic manifesto for the general election.

He said, "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.

"Many banks were left seriously weakened after the crash. But as a result of our comprehensive range of reforms, and the strong economic recovery, the banking sector is now returning to health and profitability.

"So now is the right time to ask the sector to contribute a little more to help us balance the nation's books. That's the right way to keep our strong economy on track, and build a fairer society too."

Unsurprisingly, the British Banking Association has hit out at the proposals. “Banks in the UK already pay more tax than any other industry. The tens of billions of pounds the banking sector pays each year make a major contribution to funding schools and hospitals across the country.

“Introducing yet another tax on banks will not improve financial stability,” a spokesperson said.

Last month party leader Nick Clegg, proposed an £8bn tax increase on the wealthy.

Raymond Doherty

 

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