As the Guardian notes:
In December 2009 Osborne suggested that one way to make banks make a contribution to society would be to stop them offsetting their losses against tax — a standard practice for the business community.
It is, of course, an idea I have been promoting.
But Osborne has abandoned it now he's in office. He has now, of course, to keep his future employment options open since he's a one term Chancellor.
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I suppose that I am not really surprised to read about Osborne backtracking on this. Since forming the Coalition , the Tories have renounced most of their election promises – no top down restructure of the NHS is just one example , and brought forward others that they never even mentioned – the sale of the forests. The Opposition should draw attention to this and explain to the general public that this will in effect provide a second subsidy to the banks. As in other countries, our political elites are out of step with public opinion.
You are right, of course, Richard, and not just Osborne from what I can see. There’s plenty of positioning for the future based on self interest going on across government.
However, there’s much more to this, I think, which makes these developments particularly worrying from the perspective of those of us who are interested in developing public policy that works for the majority of the citizens of the UK.
We have a government where self interest is combined with three other features: an ideological bent for private good, public bad; a rush to ‘prove itself’ through fast, aggresive policy development; and an almost obsesive belief that many of the policies of the previous government (apart from those directly related to the ultra-Blairites) are worthless. Taken together these create a perfect storm for public adminstration and public services in this country, and society more generally in due course, and one that we will be paying the price for for many years to come.
I’m really not sure that you can possibly advocate retrospectively changing tax legislation – changing rules on paying tax AFTER the period in question has ended.
For one thing, I’m pretty sure it’s against EU law, and secondly the thing that businesses already say they dislike most about locating in the UK is the constantly changing tax legislation. I can think of nothing that would give international businesses more concern about locating in the UK than backdating a pretty brutal rule change like this.
The banks profits stem partly from risk free bond speculation. borrow from taxpayer(uk government) at 0.5% and buy along the gilt curve and earn free carry. Why doesn’t the government give these cheap rates directly to the public via those banks which the government has a majority stake.