Brown and Darling at odds over new tax on banks

Click to follow
Indy Politics

Gordon Brown is considering following Barack Obama in imposing a fresh tax on banks to compensate for the huge state-funded bail-outs they received during the financial crisis.

Downing Street sources said a plan for an annual insurance fee in Britain remained on the table, despite Alistair Darling yesterday ruling out the move.

President Obama last week introduced a 0.15 per cent tax on the liabilities of the 50 largest financial institutions, which have assets of more than $50bn (£31bn).

The President criticised the "obscene" bonuses paid out by banks and said the levy would recover $90bn over 10 years spent by the taxpayer on bailing out Wall Street.

The Obama plan is similar to the "systemic risk levy" drawn up by UK officials last year. The levy was one of four options proposed in Whitehall for getting banks to bear some responsibility for the financial crisis – on top of the windfall tax on bonuses unveiled last month.

The proposals were contained in a 70-page document calling for global measures to shift the risk away from taxpayers and on to the banks, which was published alongside the pre-Budget report.

A No 10 source said last night: "We're certainly still looking at all these options. Clearly the US measures move the argument on and will get engagement."

But, suggesting another split between No 10 and the Treasury, Mr Darling yesterday appeared to rule out the move, saying the UK had introduced the windfall tax on bankers' bonuses, unveiled in the PBR. Asked if he was considering following the US Treasury plan, the Chancellor told The Scotsman: "No, the Americans are doing something different."

In a separate interview, Mr Darling said the Government had taken shares in RBS and Lloyds Banking Group and that the money would be recouped when the banks are sold.

The shadow Chancellor, George Osborne, said yesterday that the Tories would introduce an insurance tax on banks if there was agreement across the G20.

Comments