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Taxing the banks

February 8, 2011
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Quite a lot of people ask me why doesn’t the government take more money off the banks?  Well today the coalition government did just that, imposing an extra £800 million levy on them this year, on top of the £1.7 billion already announced.

The government will now set a bank levy of £2.5 billion every year.  If the banks continue to return to profitability then there must be scope for increasing the levy later in the Parliament.   This is a new charge, the last government declined to take money off the banks in this way.  Maybe it will stop the bleating of Labour MPs that the levy this year was set to bring in less than the net £2.3 billion brought in by Chancellor Darling’s one off super tax on bonuses last year.  I doubt it!

The levy is the start of what I hope will develop into a broader “Robin Hood Tax”.  The government has confirmed that it is looking at a Financial Activities Tax, FAT.  We will have to wait until the outcome of the Vickers Commission review of the banking sector before pursuing this any further.

Meanwhile, I guess we’ll have our views on how to utilise the extra £800m.  Personally, I think funding an adequate replacement for EMA and continuing support for debt advice and financial inclusion would be good candidates.

10 Comments leave one →
  1. February 8, 2011 9:52 pm

    “Personally, I think funding an adequate replacement for EMA and continuing support for debt advice and financial inclusion would be good candidates”.

    All great causes Stephen. I’m impressed🙂

    • Oliver permalink
      February 8, 2011 10:00 pm

      Unfortunately empirical data on this subject widely discredits the view that investment in education at this stage of a “childs” development is worth while, and infant return on investment for younger and pre school education is this highest. Effectively saying there are diminishing marginal returns on investment in education as age increases. Hence one arguement for an increase in university fees

  2. David Roberts permalink
    February 8, 2011 11:04 pm

    Mr Williams,

    You seem to have plenty of time to write these blogs. However apparently so very little time to give your public support to the Brigstowe Project’s recent fight for survival. This is in contrast to that given by several other members of Parliament for Bristol. Now if we were to believe your previous words on HIV (some to be read in this very blog) this was a cause that should have been a priority for you.

    I suggest that perhaps anyone who reads your words should do so with caution and would be better to judge your integrity and suitability as their democratic representative by your action in future.

    • Cllr Jon Rogers permalink
      February 9, 2011 8:35 am

      Can I be clear to Mr Roberts that the speedy and decisive questioning by Stephen Williams MP on behalf of his constituents of Bristol City Council officers was one of the reasons that I over-ruled the officer recommendation to decommission Brigstowe Project.

      You may think that it is only by seeking maximum publicity that progress can be made. That is not true, and Stephen is absolutely excellent at the diplomacy and tact required to bring about solutions rather than just generate hot air.

    • February 9, 2011 10:40 am

      David Roberts – I don’t know where on earth you get this opinion from – I met Brigstowe Project within days of them contacting me to say they had a problem. I met the staff and two service users. I wrote to the City Council to back their case and discussed the issue with Cllr Jon Rogers, who had to make the final decision. As you can see from Jon’s posting, the decision was actually a positive one. Incidentally, this is not the first time I have met with Brigstowe and I also work on a number of other HIV related issues with THT and the BMA. I get slagged off a lot by people on this blog but to question my record on HIV or gay rights in general is really bizarre.

      I look forward to reading your retraction and apology.

  3. Cat permalink
    February 8, 2011 11:27 pm

    @Stephen

    A Tobin tax sounds like such a good idea and you seem to be really in favour of it but then again you were really in favour of abolishing tuition fees, I received lots of leaflets with your picture on it signing a big pledge promising to vote against any increase in fees. But you abstained and have argued in favour the new system. So, I’m left with a feeling that you will say anything to get elected and will break specific campaign pledges if you think it will further your ascent up the greasy pole.

    Frankly, why should I believe a word you say ever again?

    • February 9, 2011 11:16 am

      I spoke at a Bristol Festival of Ideas event on the Robin Hood Tax a few months ago and urged the Chancellor to go ahead with a FAT at Treasury questions in December.

      On election pledges, you must have been reading someone else’s leaflets. Tuition fees hardly featured in them. The issues that were featured over and over again were:

      1 £10,000 income tax zero rate band – this is being implemented by the coalition;
      2 A pupil premium – this is being implemented by the coalition;
      3 a green and sustainable economy – many initiatives such as Green Deal, Carbon Capture and storage, Green Investment Bank being announced and many more on way by coalition;
      4 Constitutional reform – an AV referendum in May, reform of House of Lords and many other issues on way by coalition govt.

      All the above were said and as they are happening perhaps you should suspend your cynicism!

      • Cat permalink
        February 9, 2011 8:25 pm

        “On election pledges, you must have been reading someone else’s leaflets. Tuition fees hardly featured in them.”

        Oh, there was another Stephen Williams standing in Bristol West? I didn’t realise and he looks so like you – http://bit.ly/e7vkiH

        And that is a very interesting argument, you “hardly” mentioned your tuition fee pledge so you aren’t bound by it. I think I’ll stay cynical with politicians like you around!

        “1 £10,000 income tax zero rate band – this is being implemented by the coalition;”

        You’ve increased VAT, you’re moving the tax burden from progressive income tax to regressive VAT.

        “2 A pupil premium – this is being implemented by the coalition;”

        The tory version of it is, the £2.5bn is not extra money as you promised but rather a re-arrangement of existing funding.

        “3 a green and sustainable economy – many initiatives such as Green Deal, Carbon Capture and storage, Green Investment Bank being announced and many more on way by coalition;”

        The Green Deal is being paid for by slashing WarmFront’s budget, CCS was already in progress and the Green Investment Bank isn’t really a bank.

        “4 Constitutional reform – an AV referendum in May, reform of House of Lords and many other issues on way by coalition govt.”

        A miserable little compromise.

  4. February 10, 2011 9:30 pm

    Lord Oakeshott would certainly agree, Osborne is really sticking it to the bankers, ha ha ha.
    Not to worry though, hes out, just like Vince Cable over BskyB. Can’t have Lib Dems speaking out like that!

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