New Clause 3 - Review of the bank levy

Part of Finance (No. 3) Bill – in a Public Bill Committee at 3:00 pm on 9 June 2011.

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Photo of Stella Creasy Stella Creasy Labour, Walthamstow 3:00, 9 June 2011

I was just about to come on to that. My point is that these pressures are coming through, and there is a lack of action from the Government in introducing a cap on the total cost of credit, so we have to look at what else we can do. The Bill opens the Pandora’s box of using taxation to affect problems that we have identified in society. The concept of problem drinking has been very clearly indentified, and I argue that we should be looking at problem lending. My understanding is that the Government have been influenced by the work of Richard Thaler and “Nudge”. I know that the Minister is not keen on people being too clever and referencing academic work, so let us be simple about this: nudging talks about Government being choice architects, helping people to make good choices by ensuring that their default option is a positive one. That is what the new clause is about, and the review would offer the opportunity to do that.

I want to test whether the Government think that the bank levy would be an appropriate nudge option for those companies, to make the default option for how they lend beneficial rather than detrimental to consumers. I also want to ask whether we might look at other forms of taxation during consideration on Report.