This is no Robin Hood Tax
The Chancellor deserves some credit for going ahead with a unilateral levy on UK banks. This may well have helped encourage the French and German governments to take similar measures today.
It should not be forgotten that Labour spent the election campaign rubbishing a unilateral bank tax, as part of their quixotic campaign for the business vote.
But what has emerged today is very modest.
The IoS reported that Treasury officials were working on plans for an £8 billion levy. Other estimates talked of £5 billion. A Robin Hood transaction tax could raise significantly more.
Yet all we have today is a levy of £2 billion. It’s set at a lower rate than the similar measure in the USA.
Significantly it will raise less than Alastair Darling’s tax on bonuses. In other words the City faces a lower tax burden next year.
Financial News comments:
In past years the financial community has had to bear more than its fair share of the burden of tax rises. This time, it is simply sharing the pain being inflicted on the whole country to pay for past profligacy.
I think we can translate this as the City has been let off today as poor mothers pay a heavy price.