Osborne set to press ahead with plans for new bank tax

How can the Government apply a blanket tax when not all banks needed help from the taxpayer? RBS and Lloyds (HBOS actually) were the banks that had their toxic debt transferred to the taxpayer...not Barclays or HSBC. If I was Barcalys or HSBC I'd delist and move my business abroad! UK Plc would lose the employment and corporation tax revenue. No sense in that!

I think it would be a tax on transactions? Anybody?

The bank tax is a political maneuvre by Osborne, just as the cabinet vote for a 5% reduction in their salary was a political maneuvre by Cameron.

It is a political maneuvre by the shepherds to attempt to pacify their sheep.

The trouble is that there will be pain in the electorate. Pain from the removal of stimulus measures. Pain from the implementation of increased taxes. Pain in increased unemployment and reduced social mobility. Pain from high inflation. Pain in higher interest rates. Pain in the property market correction.

And why will there be this pain?

Because of the over-lending by the bankers and the consequent "requirement" (we can use that term loosely!) for a bailout.

When the electorate feel this pain, they are going to remember that the bankers got us into this mess, and it is because of them that the masses will now experience misery by way of a substantial reduction in the quality of life.

Couple this, of course, with the reform of public sector pensions (and the rest!), and you'll see a society MORE than ready to revolt.

Who was it that said that the UK is not so different to Greece?

Why should the prudence in running their own ship as demonstrated by HSBC and Barclays be taxed, when the pain in the financial world has been created by the likes of Northern Rock, Lloyds TSB, HBOS and RBS. There would seem a complete lack of equity in this proposal.

I agree with The Cynic and would add......Banks that have shares owned by "us" should be left to recover so that the shares can reach a level to be sold off to return the loan and, of course, those that didn't require Government help shouldn't be punished. The fault lies with the previous government and they're gone, move on I say.

If boy Osborne thinks the banks will continue to base their operations in the UK after his bank tax he is even more naive than we thought.. Given our dependence on the financial sector it beggars belief that he can consider unilateral action. The Swiss and others must be rubbing their hands together in eager anticipation of the goodies to come.

Non related points:

Firstly the Banks should be made to pay back all the bailout money which they were loaned on my, our, taxpayers behalf. Surely that would reduce the deficit by a significent figure. I forget the total bailout to the banks involved. Anybody?? Have Cameron or Osborn mentioned this recently?

Osborn's idea of a bank tax or levy of 1 billion is a smoke screen. A tax on interest charged above a certain figure? A tax on excessive profit? A tax on the excessive bonus culture?

Whatever in the present model, the banking system has the average citizen over a barrel and it seems most Governments. This model favours only the already wealthy. .......What is required is a new paradigm, a shift which creates a level and even playing feld for all.

On a different point Osborn is the immature individual who had the arrogance to laugh at the expense of a French President, on TV, for being shorter than him......mmm .... this is the character of the man who is chancellor..... oh!

Public Sector Pensions: If an individual pays into a pension( public sector or Private) every month they have the right to expect that their money is being safely invested and ringfenced, not just used by the Government of the Day( in the case of PSP). Another smokescreen by Nick Clegg ...... a tissue of fabrication. Whose for a New Paradigm?

There are two sides to this coin: the banks were lending irresponsibly, but we were also borrowing irresponsibly.

It's fair to say that credit has been too freely available, and the banks are culpable in this respect. However, I don't think we can forget that we, the Consumer, took them up on their offers of credit and spent beyond our means.

I didn't personally, and I'm sure most on here didn't either, but, as a collective entity, shouldn't we shoulder some of the responsbility? Or at least, put up with some of the pain?

In other words, aren't the people who borrowed beyond their means just as guilty as the banks? If not more so?

I shudder sometimes at the lack of personal responsbility that people have these. Everything is always someone else's fault!

The Treasury in charge of the fiscal policy, the BOE in charge of the monetary polcy and FSA in charge of regulation. There is nothig wrong with that principle. The FSA is beginning to bite and has improved in many ways and the city is noticing. The Chancellor should perhaps strengthen the FSA and set performance targets. Any tinkering with the above principle will create uncertainty and mayhem and that is the last thing we need now.

Those responsible as individuals should be the ones who pay. The likes of Fred the Shred and all the others should basically have their assets taken off them, their pensions reduced to state level and put on trial. Extreme? Why? They are about to cause absolute misery for hundreds of thousands, if not millions, of people in this country. At the moment they have got off scott-free. Not good enough.

We don't just need a banks' tax. The money the average citizen pays for goods or services whether provided by the private or public sector all comes from the same source- us. If some get excessive rewards in the private or public sector those excesses should be clawed back in tax just as they had to be immediately after the second world war. The huge sums paid out in top management salaries and bonuses can only be afforded by limiting the workers' pay, overpricing goods or diminishing dividends i.e at the expense of the rest of society.

Correct me if I'm wrong but my understanding is that the Govt. did not "LEND" the banks any money. A crisis situation developed because Mervyn King in his capacity as Governor of the BoE refused to do so. Alistair Darling then agreed to make monies available to the BoE for the purpose of underwriting Northern Rock's depositors until a suitable buyer could be found for the equity of that business. However, after due diligence it was found that the value of its loan book was virtually unquantifiable, so in return for money to meet current cashflow requirements the Govt. nationalised it. In effect declaring Northern Rock bankrupt and confiscating its assets as the major creditor.

An even worse situation presented itself when RBS came knocking on the door of the Treasury with the same pityful tale. However in that case although RBS wanted a larger ammount of money it was smaller than the value of the business assets, so the treasury bought tranches of ordinary and preference shares which accounted for approxamately 80% of the issued share capital at that time.

HBoS was then seen with cap in hand, but this time the Govt. decided to rope in Lloyds TSB to bring about a shot gun marriage. Lloyds agreed but on condition the Treasury took a vested interest in the form of equity in the combined enterprise. The Govt's investment accounts for approxamately 50% of the issued share capital.

It will be appreciated at this point that there are no loans which have to be repaid. The treasury simply owns equity stakes in these three banks which will become more valuable or less valuable as time progresses. However the Govt. has said it will sell these stakes if it can guarantee a reasonable return for the taxpayer. The problem is that at the moment there is not very many pouter pidgeons strutting about with a fat wallet under their wing.

I think George Osborne will regret dancing to the Lib Dems' tune on tax generally and specifically on a unilateral tax on those banks that stay put long enough to pay it.

Well done CONLIBS, you are on the way to success in destroying the British Financial sector. Paving the way for foreign control and profits going abroad.

Where were all these politically savy economically savy non-stupid british voters at the time of the last election?

Thanks Hotrod for your intelligent, fluent and well-written post - so unusual for these pages. Most people who post on here do so simply to vent their anger, envy or frustration at their own plight. Less than 10% of the content sheds any light on the subject we are being asked to comment on.