Will the coalition go to war with the banks?

Ministers “actively exploring” plans for a permanent tax on bank pay and profits.

If the banks were expecting a quiet life under the coalition they were wrong. After allowing them a lucky escape in the Budget (Deutsche Bank memorably described it as a "good outcome for banks"), ministers are now "actively exploring" plans for a permanent tax on bank pay and profits.

In a speech to the British Bankers' Association last night, the City minister, Mark Hoban, warned guests that ministers are looking into the introduction of a "financial activities tax", likely to raise at least as much as the £2.5bn the banking levy will bring in.

But rather than adopting the confrontational tone of his predecessor Paul Myners, Hoban is appealing to bankers' self-interest. Here is an extract from his arrticle for the Guardian's Comment Is Free today:

Now is the time for banks collectively to restore their reputation. That means taking an active role in the recovery and treating businesses, savers and borrowers -- all of whom funded the bank bailout -- fairly. Whether the public learns to trust the banks again is down to how banks behave. They must play their part -- their fate is in their hands.

The irony is that it may fall to a centre-right coalition to accomplish what a centre-left government could not. Ensuring that the banks pay their fair share and pushing through structural reform could be a Nixon-in-China moment for David Cameron.

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George Eaton is political editor of the New Statesman.

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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.