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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If there’s no booze or naked women, what’s the point of being a footballer?

Peter Crouch came out with one of the wittiest football lines. When asked what he thought he would have been but for football, he replied: “A virgin.”

At a professional league ground near you, the following conversation will be taking place. After an excellent morning training session, in which the players all worked hard, and didn’t wind up the assistant coach they all hate, or cut the crotch out of the new trousers belonging to the reserve goalie, the captain or some senior player will go into the manager’s office.

“Hi, gaffer. Just thought I’d let you know that we’ve booked the Salvation Hall. They’ll leave the table-tennis tables in place, so we’ll probably have a few games, as it’s the players’ Christmas party, OK?”

“FECKING CHRISTMAS PARTY!? I TOLD YOU NO CHRISTMAS PARTIES THIS YEAR. NOT AFTER LAST YEAR. GERROUT . . .”

So the captain has to cancel the booking – which was actually at the Salvation Go Go Gentlemen’s Club on the high street, plus the Saucy Sporty Strippers, who specialise in naked table tennis.

One of the attractions for youths, when they dream of being a footballer or a pop star, is not just imagining themselves number one in the Prem or number one in the hit parade, but all the girls who’ll be clambering for them. Young, thrusting politicians have similar fantasies. Alas, it doesn’t always work out.

Today, we have all these foreign managers and foreign players coming here, not pinching our women (they’re too busy for that), but bringing foreign customs about diet and drink and no sex at half-time. Rotters, ruining the simple pleasures of our brave British lads which they’ve enjoyed for over a century.

The tabloids recently went all pious when poor old Wayne Rooney was seen standing around drinking till the early hours at the England team hotel after their win over Scotland. He’d apparently been invited to a wedding that happened to be going on there. What I can’t understand is: why join a wedding party for total strangers? Nothing more boring than someone else’s wedding. Why didn’t he stay in the bar and get smashed?

Even odder was the behaviour of two other England stars, Adam Lallana and Jordan Henderson. They made a 220-mile round trip from their hotel in Hertfordshire to visit a strip club, For Your Eyes Only, in Bournemouth. Bournemouth! Don’t they have naked women in Herts? I thought one of the points of having all these millions – and a vast office staff employed by your agent – is that anything you want gets fixed for you. Why couldn’t dancing girls have been shuttled into another hotel down the road? Or even to the lads’ own hotel, dressed as French maids?

In the years when I travelled with the Spurs team, it was quite common in provincial towns, after a Saturday game, for players to pick up girls at a local club and share them out.

Like top pop stars, top clubs have fixers who can sort out most problems, and pleasures, as well as smart solicitors and willing police superintendents to clear up the mess afterwards.

The England players had a night off, so they weren’t breaking any rules, even though they were going to play Spain 48 hours later. It sounds like off-the-cuff, spontaneous, home-made fun. In Wayne’s case, he probably thought he was doing good, being approachable, as England captain.

Quite why the other two went to Bournemouth was eventually revealed by one of the tabloids. It is Lallana’s home town. He obviously said to Jordan Henderson, “Hey Hendo, I know a cool club. They always look after me. Quick, jump into my Bentley . . .”

They spent only two hours at the club. Henderson drank water. Lallana had a beer. Don’t call that much of a night out.

In the days of Jimmy Greaves, Tony Adams, Roy Keane, or Gazza in his pomp, they’d have been paralytic. It was common for players to arrive for training still drunk, not having been to bed.

Peter Crouch, the former England player, 6ft 7in, now on the fringes at Stoke, came out with one of the wittiest football lines. When asked what he thought he would have been but for football, he replied: “A virgin.”

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 01 December 2016 issue of the New Statesman, Age of outrage