Spending Review: Bank levy to be made permanent
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A levy on bank balance sheets will be made permanent, potentially raising billions of pounds, Chancellor George Osborne has confirmed.
The chancellor said he would introduce legislation on Thursday in order “to extract the maximum sustainable tax revenues from financial services”.
He said he wanted banks to make a fair contribution.
The banking industry said the move would have an impact, particularly on overseas banks operating here.
The government expects the levy to generate about £2.5bn a year.
“We neither want to let banks off making their fair contribution, nor do we want to drive them abroad,” the chancellor said.
“Many hundreds of thousands of jobs across the whole United Kingdom depend on Britain being a competitive place for financial services,” he added.
The levy is not expected to affect smaller banks and building societies but the UK operations of foreign banks will have to pay the levy.
The British Bankers’ Association said that banks “fully understand they have a role to play in the UK’s economic recovery”.
“Decisions taken today will have an effect on the whole industry and particularly on overseas banks operating in the City,” it added.
“We clearly need to see the detail of today’s announcements to be able to assess their impact on the UK banking sector and our attractiveness as a global financial centre.”
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