Labour attacks Osborne over "£2bn tax cut" for the banks

The party releases new figures showing that the banks have paid £1.9bn less in tax than David Cameron promised after cuts to corporation tax.

Parliament officially returns from its Easter recess today and Labour's number crunchers are already causing mischief for George Osborne. The party has accused the Chancellor of handing banks a £2bn tax cut after releasing new figures showing that the coalition's bank levy has raised significantly less than expected in the last two years. 

David Cameron pledged that the levy would raise £2.5bn a year and offset the gains to banks from the cuts in corporation tax. But figures from the OBR show that the levy raised just £1.6bn in 2012-13, while banks received a corporation tax cut of £200m, leaving the Treasury with a net gain of £1.4bn - £1.1bn less than promised. The previous year (2011-12), the levy raised £1.8bn, while the banks gained £100m from the corporation tax cut, a net gain of £1.7bn, or £800m less than promised. In total, then, the banks have paid £3.1bn in tax, £1.9bn less than pledged by Cameron (see table below).

 

2010-11

2011-12

2012-13

Labour bank bonus tax (£bn)

3.5

n/a

n/a

Tory-led Government bank levy (£bn)

n/a

1.8

1.6

Corporation Tax rate (%)

28

26

24

Corporation tax cut for banks from 2010-11 level (£bn)

n/a

0.1

0.2

Net amount raised from banks (£bn)

3.5

1.7

1.4

Amount raised compared to £2.5bn promised by govt (£bn)

n/a

-0.8

-1.1

Chris Leslie, the shadow financial secretary to the Treasury, plans to raise the figures when the Commons debates the second reading of the Finance Bill later today. He said: 

On top of last week’s tax cut for millionaires, this is effectively a tax cut of nearly £2 billion for the banks at a time when millions of working people are being forced to pay the price for this government’s economic failure.

Whether it’s on tax or watering down reforms to separate retail and investment banks, David Cameron and George Osborne have repeatedly failed to stand up to the vested interests of the banks.  

Labour is still urging the coalition to repeat Alistair Darling's bank bonus tax, which raised £3.5bn in 2010-11, in order to fund a jobs guarantee for every young person unemployed for more than a year (a measure the party is particularly keen to highlight as the benefit cap and other welfare reforms take effect). 

The Treasury has responded by stating that the "fragility of global financial markets" means it is unsurprising that the levy has raised less than by expected and by promising to review it this year "to ensure it is operating efficiently". 

As for the bank bonus tax, we can expect Osborne to point out that Darling himself described it as a "one-off" on the grounds that "the very people you are after here are very good at getting out of these things and will find all sorts of imaginative ways of avoiding it in the future". To most voters, however, that will sound like an argument for tackling avoidance, not for cutting taxes. And the banks' toxic reputation, combined with the image of a government devoted to the rich, means this remains fertile political territory for Labour. 

In the last two years, the banks have paid £3.1bn in tax, £1.9bn less than the government promised. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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The dog at the end of the lead may be small, but in fact what I’m walking is a hound of love

There is a new, hairy face in the Hovel.

There is a new, hairy face in the Hovel. I seem to have become a temporary co-owner of an enthusiastic Chorkie. A Chorkie, in case you’re not quite up to speed with your canine crossbreeds, is a mixture of a chihuahua and a Yorkshire Terrier, and while my friend K— busies herself elsewhere I am looking after this hound.

This falls squarely into the category of Things I Never Thought I’d Do. I’m a cat person, taking my cue from their idleness, cruelty and beauty. Dogs, with their loyalty, their enthusiasm and their barking, are all a little too much for me, even after the first drink of the day. But the dog is here, and I am in loco parentis, and it is up to me to make sure that she is looked after and entertained, and that there is no repetition of the unfortunate accident that occurred outside my housemate’s room, and which needed several tissues and a little poo baggie to make good.

As it is, the dog thinks I am the bee’s knees. To give you an idea of how beeskneesian it finds me, it is licking my feet as I write. “All right,” I feel like saying to her, “you don’t have to go that far.”

But it’s quite nice to be worshipped like this, I have decided. She has also fallen in love with the Hovel, and literally writhes with delight at the stinky cushions on the sofa. Named after Trude Fleischmann, the lesbian erotic photographer of the Twenties, Thirties and Forties, she has decided, with admirable open-mindedness, that I am the Leader of the Pack. When I take the lead, K— gets a little vexed.

“She’s walking on a loose lead, with you,” K— says. “She never does that when I’m walking her.” I don’t even know what that means, until I have a think and work it out.

“She’s also walking to heel with you,” K— adds, and once again I have to join a couple of mental dots before the mists part. It would appear that when it comes to dogs, I have a natural competence and authority, qualities I had never, not even in my most deranged flights of self-love, considered myself to possess in any measurable quantity at all.

And golly, does having a dog change the relationship the British urban flâneur has with the rest of society. The British, especially those living south of Watford, and above all those in London, do not recognise other people’s existence unless they want to buy something off them or stop them standing on the left of the sodding escalator, you idiot. This all changes when you have a dog with you. You are now fair game for any dog-fancier to come up to you and ask the most personal questions about the dog’s history and genealogy. They don’t even have to have a dog of their own; but if you do, you are obliged by law to stop and exchange dog facts.

My knowledge of dog facts is scant, extending not much further beyond them having a leg at each corner and chasing squirrels, so I leave the talking to K—, who, being a friendly sort who could probably talk dog all day long if pressed, is quite happy to do that. I look meanwhile in a kind of blank wonder at whichever brand of dog we’ve just encountered, and marvel not only at the incredible diversity of dog that abounds in the world, but at a realisation that had hitherto escaped me: almost half of London seems to have one.

And here’s the really interesting thing. When I have the leash, the city looks at me another way. And, specifically, the young women of the city. Having reached the age when one ceases to be visible to any member of the opposite sex under 30, I find, all of a sudden, that I exist again. Women of improbable beauty look at Trude, who looks far more Yorkie than chihuahua, apart from when she does that thing with the ears, and then look at me, and smile unguardedly and unironically, signalling to me that they have decided I am a Good Thing and would, were their schedules not preventing them, like to chat and get to know me and the dog a bit better.

I wonder at first if I am imagining this. I mention it to K—.

“Oh yes,” she says, “it’s a thing. My friend P-J regularly borrows her when he wants to get laid. He reckons he’s had about 12 shags thanks to her in the last six months. The problems only arise when they come back again and notice the dog isn’t there.”

I do the maths. Twelve in six months! That’s one a fortnight. An idea begins to form in my mind. I suppose you don’t have to be a rocket scientist to work out what it is. But no. I couldn’t. Could I?

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 28 April 2016 issue of the New Statesman, The new fascism