While Alistair Darling was branding Cameron's proposed unilateral levy on banks as 'policy on the hoof' and 'a hell of a risk', the banking industry as a whole was reportedly 'deeply worried' that any such tax would force banking institutions abroad.

This comes as a result of the Conservative leader announcing an apparent U-Turn on Saturday by saying that his party would impose a levy, now being called a 'pollution tax', on the banks should his party gain power after the next election.

Alistair Darling prefers an internationally agreed tax on banks, which he says would deter banks from moving from one country to another to avoid it. Up until Saturday's revelation this was also thought to be Tory policy. The Chancellor is expected to reinforce his party's position at the next budget on Wednesday 24th March.

With around a million jobs in the UK reliant on the financial services industry there are obvious concerns about the future should banks uproot and move abroad.

But the Tories are not completely in the wilderness on this one. It is almost certain that the US will impose some sort of banking tax and Sweden has already done so. Cameron has also climbed onboard the popular 'bash the bankers' bandwagon and promised to take on the vested interest of the bankers, whilst claiming that Labour has failed to stand up to the City.

Neither Labour nor Conservative have given any real clue on what form such a levy or tax would take. The banks are of course keen to be given some sort of guidance, but some have in the meantime begun the process of moving non-tied business out of the UK.

Like President Obama, Cameron has effectively promised to get taxpayers' banking bail out money back, 'every cent they put in'.

Comment Here!

comments