Plans to tax Britain’s banks should be lifted with an additional £1bn levy in order to help pay off the deficit, will be announced by the Liberal Democrats today.
Danny Alexander, chief secretary to the Treasury, is making a bid to have the proposal included in the chancellor’s Budget later this month. If it is not announced then, the plan will be included in the Lib Dem election manifesto in May.
“Failings in the banking system were a major factor in the great crash of 2008,” he commented. “That is why we have always insisted that the banks help fund repairing the economy. With the final stage of deficit reduction requiring around £30bn of savings, it would be totally wrong for all of that to be found from cuts to public services as the Conservatives propose.”
Alexander said the banks had recovered sufficiently to make a contribution to deficit reduction on top of the existing bank levy: “Now is the right time to ask the sector to contribute a little more to help us balance the nation’s books.”
He added that the tax should stay in place until the banks have made a “fair contribution” to deficit reduction.