George Osborne criticised after bank lobbying revealed

Posted On: 
15th January 2016

John McDonnell has accused George Osborne of doing “whatever the bankers call for” after it emerged major financial institutions had lobbied the Chancellor to drop the bank levy. 

Mr Osborne announced in his July Budget that the levy, which raises approximately £2bn a year, would be reduced from 0.21% to 0.1% by 2021. It will also apply only to banks’ UK balance sheets.

Freedom of Information requests from the Evening Standard reveal that the CBI, HSBC, Royal Bank of Scotland and the British Bankers’ Association (BBA) all called on the Government to make changes to the levy when it was introduced in 2010.

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In its consultation response, the BBA said the levy would have a “detrimental effect” and argued that it should not apply to overseas assets.

Alongside the changes to the bank levy, Mr Osborne announced that there would be an 8% surcharge on bank profits.

Mr McDonnell, the Shadow Chancellor, said: "This is yet another example of how George Osborne dances to the tune of whatever the bankers call for, and everyone else is a second thought.

"The Chancellor has an ever softer touch on the banks; cutting the Bank Levy, slashing corporation tax, selling the publicly owned banks off at a loss, watering down the regulations on senior bankers, and staying silent when the watchdog he set up watered down its review into the sector.

"Customers and taxpayers who bailed out the banks and continue to pay the price for their past actions and excesses will see this as yet more proof that George Osborne is simply on the side of those who run the banks and not those who rely on them."

A Treasury spokeswoman told the Standard: “Any suggestion of undue influence is wrong.”