The government has unveiled the details of its £2.5bn banking levy, comprising a wide-ranging package of tax measures, but its detractors have already slammed the taxes, saying that they were "puny".
The tax will be levied on wholesale liabilities over £20bn. Up to 40 banks and building societies will be charged 0.05 per cent of their global balance sheets in its first year, slightly higher than the 0.04 per cent previously announced by the government. In 2012, the levy will be applied at the rate of 0.075 per cent rather than the 0.07 per cent proposed in the budget.
However, critics of the banking industry accused the government of going "soft" on the bankers and exhorted it to raise its target for the levy.
The bank levy has been designed to repair some of the damages caused by banks in the financial crisis, but tax campaigners pointed out that the £2.5bn bank levy could hardly be considered to be a "fair contribution", given that bank bosses will be getting around £7bn in the form of bonuses this year.
David Hillman, spokesman for the Robin Hood Tax campaign, pointed out that almost £1.2tn of taxpayers' money had been used to bail out the industry during the financial crisis.
"The banks can afford to pay an extra £2bn a year which could protect the poorest at home and abroad. The case is clear - the banks can pay more and the government must get serious about its commitment to fairness," he said.