The Government's levy on the banks will raise only £1.8bn in the current financial year instead of the £2.5bn figure repeatedly trumpeted by David Cameron and George Osborne.
It is the second year running that the Chancellor, pictured has fallen short of his goal for raising money from the banks. The lower than expected revenue from the levy on the banks' balance sheets was confirmed by the Office for Budgetary Responsibility (OBR), the independent fiscal watchdog, in its latest twice-yearly report on the economy.
Labour accused the Government of letting the banks off the hook and handing them a "double tax cut", claiming the sector would also enjoy a £200m bonus from reductions in corporation tax for all businesses. It meant the tax burden on banks would be £1.6bn in the current financial year, almost £1bn less than the £2.5bn target, Labour added.
The OBR said it had lowered the forecast revenue from the levy "as a result of latest receipts data and information on likely full-year liabilities". It warned that plans for greater regulation, such as banks splitting their high street and investment operations, would "constrain the growth in banks' balance sheets".
The revenue loss is embarrassing for ministers, who claim the levy ensures the banking sector makes a "fair contribution" which reflects "the risks it poses to the financial system and the wider economy".
A Treasury aide said last night: "This Government is determined to ensure banks make a fair contribution, which is why we introduced a permanent bank levy in contrast to Labour's one-off levy. We've also been clear that we expect the bank levy to raise at least £2.5bn each year, which is why we increased the rate this January. The increase in the bank levy rate also ensures they do not benefit from the cut in corporation tax that other businesses do."
Chris Leslie, a Labour Treasury spokesman, said: "It tells you all you need to know about this Government that... the banks are getting a tax cut while millions of working people are being forced to pay the price for this Government's economic failure."
Mr Cameron promised in January 2011: "The bank levy will raise £2.5bn." He later said that the Government's levy "will raise more every year than Labour's one-off bonus tax raised in one year".
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