Tuesday, November 17, 2009

Vince Cable says a banking levy would produce a fair deal for the taxpayer

The UK banks owe their very existence to the British taxpayer with the Governor of the Bank of England estimating that they have received the equivalent of £1 trillion in taxpayer support.

But it does not stop there. The banking industry is unique in having the taxpayer acting as a safety net. Until the banks can be successfully broken up, the Liberal Democrats believe that they should pay for the explicit guarantee that they receive.

Liberal Democrat Shadow Chancellor, Vince Cable has today proposed creating a new levy on bank profits at a rate of 10%, with all the revenue raised (estimated next year to be around £2bn) going towards tackling the structural deficit.

Commenting, Vince Cable said:

"One trillion pounds worth of taxpayer support has gone into keeping the British banking industry afloat.

"We must find a way to split the banks so that the British public no longer props up ‘casino’ banking.

"Meanwhile, it is only right for the taxpayer to get a fair deal for the guarantee that they provide to the banking industry.

"A 10% levy on bank profits would be used to pay down the structural deficit that they are partly responsible for creating.

"The Government should use next month’s pre budget report to put forward this proposal so that banks recognise the explicit guarantee that they currently enjoy.

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