David Prosser: Darling's Budget bonus

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The Independent Online

Outlook So how much extra cash can Alistair Darling count on from the super-tax on banking bonuses as he prepares next month's pre-election Budget? And should the fact that he is on target to raise much more than was originally envisaged (remember, the Chancellor told us the tax would raise £550m) be regarded as good news or bad?

Barclays alone is contributing half that sum to the Exchequer, yesterday's results reveal. Others, notably Goldman Sachs, have also said they will be paying out another couple of hundred million. The total take for the tax could be as much as £3bn – almost six times the original forecast.

Mr Darling's publicly-stated motivation in introducing the bonus tax, you will remember, was to put the banks off handing large payouts to their staff. He seems to have failed in that objective. Still, given the state of the public finances, there are some compensations in taking six times as much tax as you expected.

Note too, that all the talk of the tax putting bankers off working in Britain seems to have dissipated (the US, after all, is now at least talking a tougher line on banking regulation). Even though his policy hasn't worked out quite as expected, Mr Darling seems to have got away with it.

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