Post by nickd on Feb 8, 2011 8:57:02 GMT 1
Chancellor Osborne has plans to increase the bank levy in April to £2.5 billion - supposedly bringing in an additional £800 million. Apparently it's a realization that the banks are in 'better shape' with a message being given that they need to know where they stand before they set their bonus payments.
Here's some BBC coverage...
"Government to increase bank levy to £2.5bn
A deal with banks to increase loans to businesses and to limit bonus payments has not yet been finalised.
The government says it will increase the levy on bank profits to £2.5bn this year - raising an extra £800m.
The change would usually be set out in next month's Budget.
But Chancellor George Osborne said the move would help banks know the context they were operating in before announcing their bonus payments in the next few weeks.
A deal with banks to increase loans to businesses and to limit bonus payments has not yet been finalised.
Talks on the wide-ranging Project Merlin stalled last month.
Mr Osborne had originally announced that the government's new bank levy would be phased in, with a lower rate applicable in 2011.
But BBC business editor Robert Peston said the Chancellor had "concluded that the banks are in better shape than he thought less than two months ago, when he announced that a smaller levy would apply in the current year".
The coalition says the levy on bank balance sheets is a better way of making sure companies make a fair contribution to tackling the deficit than extending Labour's bank bonus tax.
The one-off tax, introduced by Alistair Darling, raised £2.3bn - after taking account of the tax reducing income tax and corporation tax receipts. This compares with £1.7bn raised by Mr Osborne's first bank.
However, the extra £800m being raised by the increased levy was relatively small, our business editor said, and was "probably of more importance from a symbolic point of view - perhaps indicating a touch more iciness in ministers' attitudes to the banks - rather than from a budgetary perspective".
Read the read of the story...
www.bbc.co.uk/news/business-12389416
I don't quite get the maths here because I thought the levy was originally going to be set at £2 billion so an increase to £2.5 would only rake in £500 million - rather than £800 million.
So why the change in heart? - well who knows - all we need to know is where's our share?
Does this create an opportunity for us to argue our case for using some of these additional funds to finance debt advice -especially given the ending of Financial Inclusion Funding? Surely it should - seeing as we help the banks recover some of their toxic debt by setting up payment plans for those who can afford to enter into one.
Sentiments which seems to be shared by the British Bankers Association - who seems to thinks Citizens Advice Bureau should benefit from £100 million in recognition of the good work they do - this being a view expressed before the potential funding was increased by this extra amount of £800 million. So come on cough up some more and we're sorted on this £350 million gaping hole in the civil legal aid spend
Nor should Government argue that the £800 million should be used solely to help small businesses without first addressing the problem of those who are already in debt and unlikely to benefit from any incentive schemes unless they can be helped to overcome their financial problems first.
Here's some BBC coverage...
"Government to increase bank levy to £2.5bn
A deal with banks to increase loans to businesses and to limit bonus payments has not yet been finalised.
The government says it will increase the levy on bank profits to £2.5bn this year - raising an extra £800m.
The change would usually be set out in next month's Budget.
But Chancellor George Osborne said the move would help banks know the context they were operating in before announcing their bonus payments in the next few weeks.
A deal with banks to increase loans to businesses and to limit bonus payments has not yet been finalised.
Talks on the wide-ranging Project Merlin stalled last month.
Mr Osborne had originally announced that the government's new bank levy would be phased in, with a lower rate applicable in 2011.
But BBC business editor Robert Peston said the Chancellor had "concluded that the banks are in better shape than he thought less than two months ago, when he announced that a smaller levy would apply in the current year".
The coalition says the levy on bank balance sheets is a better way of making sure companies make a fair contribution to tackling the deficit than extending Labour's bank bonus tax.
The one-off tax, introduced by Alistair Darling, raised £2.3bn - after taking account of the tax reducing income tax and corporation tax receipts. This compares with £1.7bn raised by Mr Osborne's first bank.
However, the extra £800m being raised by the increased levy was relatively small, our business editor said, and was "probably of more importance from a symbolic point of view - perhaps indicating a touch more iciness in ministers' attitudes to the banks - rather than from a budgetary perspective".
Read the read of the story...
www.bbc.co.uk/news/business-12389416
I don't quite get the maths here because I thought the levy was originally going to be set at £2 billion so an increase to £2.5 would only rake in £500 million - rather than £800 million.
So why the change in heart? - well who knows - all we need to know is where's our share?
Does this create an opportunity for us to argue our case for using some of these additional funds to finance debt advice -especially given the ending of Financial Inclusion Funding? Surely it should - seeing as we help the banks recover some of their toxic debt by setting up payment plans for those who can afford to enter into one.
Sentiments which seems to be shared by the British Bankers Association - who seems to thinks Citizens Advice Bureau should benefit from £100 million in recognition of the good work they do - this being a view expressed before the potential funding was increased by this extra amount of £800 million. So come on cough up some more and we're sorted on this £350 million gaping hole in the civil legal aid spend
Nor should Government argue that the £800 million should be used solely to help small businesses without first addressing the problem of those who are already in debt and unlikely to benefit from any incentive schemes unless they can be helped to overcome their financial problems first.