BOSSES at smaller banks have said that they were “disappointed” by recent meetings with Treasury officials.
Bosses from 11 challenger banks – including Metro Bank, Aldermore and OneSavings Bank – sat down with Treasury officials on Friday to voice their concerns over a new bank tax set to go into effect next year.
The tax 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.
The tax has come under sharp criticism from bank bosses, building societies and MPs alike who say it would hurt competition and choke lending.
But despite increased pressure on the Treasury, one challenger bank chief executive who attended Friday’s meeting said that the talks proved “frustrating.”
Paul Lyman, chief executive of Secure Trust Bank and the head of the British Bankers’ Association’s challenger banks panel, told City A.M. yesterday that while government officials acknowledged the role challenger banks play in promoting competition in the banking sector, they made little indication that they would revise the bank tax surcharge or introduce other measures to benefit the smaller firms.
“At this point in time, we’ve had yet to see any alignment in what the government is saying and its deeds, which is a tad disappointing,” Lyman said, adding that while he had “no objection to being taxed” he thought that challenger banks and larger firms were “not operating on the same level”.
“We’re not asking for extra advantages. We’re not asking for special treatment. We’re asking for a level playing field,” he said.
Calling the proposed tax a “counterproductive government policy”, Lyman added: “I wouldn’t be at all surprised if this were legislation that was shaped by the lobbying of the big banks.”