We now know that the UK's budget deficit will be less than expected this year. All the same, £167bn is still a pretty big hole, which will take some years to fill. While politicians have been as yet non-committal about where the necessary spending cuts and tax rises will occur, all three major parties have outlined proposals for taxing public enemy number one: the banks.
In the recent Budget, Labour chancellor Alistair Darling endorsed a global risk tax on banks. While he maintained that this should only be implemented as part of an international agreement in order to mitigate competitive distortions, the revenues - an annual levy of just 0.15% on banks' total assets would raise an estimated £3.6bn - would be for national governments to use.
For the time being, it seems that the 'Tobin' or 'Robin Hood' tax has been put on Labour's back burner: a blow for its proponents, given the impetus pundits suggest their backing would lend to a similar drive in the US. High-profile supporters of the measure project that a 0.05% levy on all bank transactions would raise enough to double foreign aid. They hope it will be among the options proffered by the International Monetary Fund at a meeting of G20 finance ministers in Washington in April.
The Conservatives' proposals are broadly similar to Labour's - though, unlike Darling, David Cameron has committed to pursuing the measure regardless of how international moves play out. This reflects the view of the Treasury Select Committee, which last week reported that the comparatively large size of the UK banking sector relative to its GDP means unilateral reform is 'in our own self-interest'. One commentator also suggests that while Labour is keen to avoid being seen as anti-capitalist, so the Tories are equally concerned not to be perceived as favouring their rich friends in the City.
Taking a different approach, the Liberal Democrats have argued for a 10% tax to be levied on the profits of all UK-registered banks - the proceeds of which would be used to fund a job creation programme. The British Bankers' Association has threatened that such a move, alongside taxes on bonuses, would be damaging and cause financial institutions to relocate; the likelihood - and benefits - of such an exodus are subject to debate.
Though they differ on what form a bank tax should take, the UK government - and the electorate - cannot afford not to act. Whoever wins the election, it seems banks' freewheeling days are numbered.
In the recent Budget, Labour chancellor Alistair Darling endorsed a global risk tax on banks. While he maintained that this should only be implemented as part of an international agreement in order to mitigate competitive distortions, the revenues - an annual levy of just 0.15% on banks' total assets would raise an estimated £3.6bn - would be for national governments to use.
For the time being, it seems that the 'Tobin' or 'Robin Hood' tax has been put on Labour's back burner: a blow for its proponents, given the impetus pundits suggest their backing would lend to a similar drive in the US. High-profile supporters of the measure project that a 0.05% levy on all bank transactions would raise enough to double foreign aid. They hope it will be among the options proffered by the International Monetary Fund at a meeting of G20 finance ministers in Washington in April.
The Conservatives' proposals are broadly similar to Labour's - though, unlike Darling, David Cameron has committed to pursuing the measure regardless of how international moves play out. This reflects the view of the Treasury Select Committee, which last week reported that the comparatively large size of the UK banking sector relative to its GDP means unilateral reform is 'in our own self-interest'. One commentator also suggests that while Labour is keen to avoid being seen as anti-capitalist, so the Tories are equally concerned not to be perceived as favouring their rich friends in the City.
Taking a different approach, the Liberal Democrats have argued for a 10% tax to be levied on the profits of all UK-registered banks - the proceeds of which would be used to fund a job creation programme. The British Bankers' Association has threatened that such a move, alongside taxes on bonuses, would be damaging and cause financial institutions to relocate; the likelihood - and benefits - of such an exodus are subject to debate.
Though they differ on what form a bank tax should take, the UK government - and the electorate - cannot afford not to act. Whoever wins the election, it seems banks' freewheeling days are numbered.
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