Chancellor threatens super-tax on bankers
Darling to target unfair bonuses in Pre-Budget Report
ALISTAIR DARLING today left the door open to a windfall tax on bankers’ bonuses amid reports the move could be central to his Pre-Budget Report.
The Chancellor warned the better-off that they would have to pay more towards the cost of the economic recovery but side-stepped questions about the prospect of a temporary levy targeted at UK-based banks.
It was reported the Treasury was considering a super-tax on bankers who receive bonuses above a certain level.
Other options included increasing national insurance charges for banks that pay big bonuses or taxing investment banks directly.
Mr Darling earlier appeared to play down the prospect of new taxes on the financial sector, but nevertheless stopped well short of ruling them out of this Wednesday’s report.
He said: “With all matters of tax – whether it’s individuals, whether it’s companies – you’ve got to be fair, you’ve got to be reasonable.
“You’ve also got to have an eye on what the long-term result of all this might be.”
But he also insisted the Government would not accept “wholly unreasonable” bonuses at banks that had been bailed out by the taxpayer. “We are not going to be held to ransom by people who believe you can pay extraordinarily high bonuses without regard to what’s going on,” he said.
Mr Darling indicated there would be no back-tracking on the new 50p top rate of income tax on earnings of more than £150,000, pencilled in for April.
And, referring to inheritance tax, he said: “It wouldn’t be right to be giving further tax breaks to people at the very top. I think people will understand that as we c o me through a difficult period like this, that we would expect the broadest shoulders to bear the greatest burden.”
Meanwhile, Prime Minister Gordon Brown will begin to detail how the Government plans to slash public spending – starting with moves to stream-line Whitehall and shelve low-priority programmes.
He will set out efficiency sav- ings worth £12bn over four years as he tries to show how Labour would halve the country’s massive budget deficit in that time.
In a speech today, Mr Brown will say the Government has identified £3bn-worth of additional efficiency savings since the Budget in April.
Of that, £1.3bn will be achieved by streamlining central government and certain programmes will have to be delayed or abandoned, he will say.