STUC on Bank Levy

February 8th 2011

Responding to the Chancellor’s announcement that the Bank Levy will increase to £2.5bn this year, Grahame Smith, STUC General Secretary said:

“This pitiful increase in the Bank Levy exposes the much vaunted ‘Project Merlin’ to be the sham we anticipated. It is deceitful of the Chancellor to pose as tough on the banks. With the cut in corporation tax and proposals to exempt corporations from tax on their foreign profits, the coalition is clearly determined that the net impact of tax changes on banks will be positive.

“The banks have roared back to high profitability and mammoth bonuses on the back of Government guarantees and support, reduced competition and cheap money. These easy profits are now in the process of being looted in the form of unearned executive bonuses. Meanwhile, just as billions leave the door in bonuses, the investment plans of growing businesses around the country are thwarted by banks supposedly keen to rebuild their balance sheets.

“As job losses among ordinary bank workers continue, stress among those lucky enough to remain in post is rocketing as the most abusive forms of performance management are implemented to reinforce the pre-crisis culture.

“The banks and their lobbyists threaten to move offshore if the financial or regulatory demands made by Government become too severe. This is absurd. The business models of all our main banks are utterly dependent on the government guarantee. Where will they find a willing Government with sufficient financial wherewithal to provide a credible guarantee? Dubai? The Cayman Islands? Lichtenstein? The banks continue to take the public for fools.

“A full two years after the crisis reached its nadir, there has been no effective regulatory or structural reform. The levy is an insult to all those workers who have suffered, and continue to suffer, from the recession caused by the banks recklessness”.

ENDS

Contact Stephen Boyd 0141 337 8100

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