Taxation (Banks)

Chancellor of the Exchequer – in the House of Commons at 2:30 pm on 6th December 2011.

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Photo of Ian Lavery Ian Lavery Labour, Wansbeck 2:30 pm, 6th December 2011

What recent assessment he has made of the level of taxation on banks.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

What recent assessment he has made of the level of taxation on banks.

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

The Chancellor announced in his autumn statement that the bank levy would increase to 0.088% from 1 January 2012, consistent with the Government’s intention to raise at least £2.5 billion each year, as set out in Budget 2011.

Photo of Ian Lavery Ian Lavery Labour, Wansbeck

In the autumn statement last week, the Chancellor announced measures that will mean that the Government will raise three times as much from cuts in child tax credits than they will raise from any additional taxes on the banks. Should he not hang his head in shame at the Government’s actions? When will they change course and stop their relentless, ruthless attack on those less well off in society?

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

The hon. Gentleman should get his facts right, because the Government are increasing the child tax credit by £135.

Photo of Hazel Blears Hazel Blears Labour, Salford and Eccles

Earlier this year, the Prime Minister announced that the high street banks would commit £200 million to the big society bank to try to fill the £5 billion shortfall currently faced by charities and the voluntary sector. To put it another way, that is just 1.4% of the £14 billion the banks have paid out in bonuses this year. What steps will the Chancellor take, including by providing further incentives, to ensure that those financial institutions commit more to community reinvestment?

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

The right hon. Lady should recognise that bank bonuses are a quarter of what they were when she was in the Cabinet. The banks are doing that. The previous Government were in office for 13 years. They had no idea about introducing a bank levy. This Government have taken the right steps to ensure that banks pay their fair share of taxes.

Photo of Therese Coffey Therese Coffey Conservative, Suffolk Coastal

My hon. Friend will be aware that banks and financial services contributed more than £50 billion in taxes last year, but has he noted that this Government’s bank levy—the permanent levy—will raise more in one year than the previous Government’s payroll tax?

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

My hon. Friend is absolutely right. Of course, the previous Government said that the bank bonus payroll tax would be a one-off tax. This Government had the courage to go forward, and to say that we would introduce a bank levy unilaterally, which the previous Chancellor opposed. We are taking the tough action on taxing banks that the previous Government failed to take.