Pressure is mounting on chancellor George Osborne to reconsider his new bank tax, as bosses from challenger banks meet today with Treasury officials to voice their concerns.
The new tax, set to go into effect next year, will take an additional eight per cent of banks’ profits each year for the government, on top of the existing corporation tax.
It will apply to challenger banks and building societies currently exempt from the existing bank levy.
Last night, Andrew Tyrie, the MP who chairs the influential Treasury Select Committee, attacked the tax, saying:
“Millions of consumers and small businesses have been getting a poor deal for decades because of inadequate competition and choice in banking. It is crucial that this surcharge does not act as an impediment to the government’s efforts to increase competition.”
Bosses from 11 challenger banks – including Metro Bank, Aldermore and OneSavings Bank – are set to meet this morning with Treasury officials this morning.
Paul Lyman, the head of the British Bankers’ Association’s challenger banks panel and chief executive of Secure Trust Bank, who will attend the meeting, said earlier this week: “What we are looking to understand is whether or not the government is serious now about matching the talk about fostering competition in UK banking with the walk. And, at this point in time, we haven’t seen any walk.”
But a Treasury spokesperson defended government policies last night, telling City A.M.:
“We have introduced a range of measures to support challenger banks: We’ve put competition at the heart of the regulatory system, significantly reduced barriers to new banks entering the market, and made sure that all banks – big or small – can access the payment systems.”