“We neither want to let banks off making their fair contribution, nor do we want to drive them abroad,” Osborne conceded.
The new bank levy, details of which are due to emerge today, will bring in more every year than the Labour government’s bonus tax, Osborne said, adding that he will aim to extract the “maximum sustainable tax revenues from financial services” in the future.
Chris Cummings, chief executive of financial services lobby group TheCityUK, welcomed the commitment to avoid driving banks abroad.
“Our sector will not balk at making a fair and predictable contribution to the taxation regime, where the taxation regime preserves the competitive position of the UK,” he said.
Stuart Fraser, chair of the policy and resources committee at the City of London, added that banks moving overseas is just one part of the picture. “Our priority must be to ensure firms operating across the financial and professional services industry see the UK as a good place to be based and in which to invest,” he said.