As the FT notes this morning:
Rishi Sunak will slash a tax surcharge on bank profits by more than 60 per cent in next week's Budget in an effort to keep the City of London competitive on a global scale in the wake of Brexit.
The chancellor will cut the surcharge from 8 per cent to 3 per cent from April 2023.
This surcharge increases the rate of corporation tax paid by banks from the 19% currently due to 27% at present, which will fall to 22% if Sunak's plan goes ahead.
What's the cost? It is hard to say precisely as the existing corporation tax statistics do not show the sum paid by banks separately, but PWC suggest that the total paid may be £2 billion. That would put the cost of the cut at £1 .2 billion.
The cut in Universal Credit by cancelling the £20 a week uplift supposedly saved the Chancellor £6 billion.
I am sure that all the families suffering a £20 decrease in their Universal Credit will be pleased to know that £4 a week of that sum will be redirected to banks to keep them competitive. That's what these figures imply.
I doubt that the thought that they're helping out bankers is going to provide much comfort to all losing their benefits this winter.
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This reifies once something that we know.
The Tories are here to help rich people – not us. This is just another long line of proof.
Who’s your daddy Boris? He extracts rent from his beneficiaries who extract rent from him. It’s the perfect self-perpetuating system. He can’t go green because he’s in the pockets of Russia.
And will anyone ask why a Government has to make private banking system ‘more competitive? I mean what about the greedy people who work in it – they could make it more competitive by having less bonuses; charging less interest even working a bit more ethically.
You know – being a little less greedy and amoral. Stuff like that.
As we can see, the Tories seem to be able to weather these outrages – because they are outrageous. But instead of just condemning voters we need to dig deeper about this seeming indifference and realise that at the heart of this democracy is in crisis.
What are the Tories spending all that fund raising on? Who is the new Cambridge Analytica in all this? Where are they operating (somewhere East perhaps)? Whose muddying the waters?
And what is HM Opposition doing and saying about things like this? What is Parliament and the Speaker saying about things like this?
The banks will also benefit from the cut in Universal Credit which will force thousands (or millions?) of claimants to borrow money from them either on loans or running up credit card debt and the banks laughing all the way to themselves with the interest or exorbitant interest rates they will charge. Parasites!
I don’t think you understand what it means to survive on universal credit. Few have access to loans or credit cards.
I don’t think this invalidates the point you are making but I think the numbers you are using are not right.
The bank surcharge will only be reduced from April 2023 – the date at which the general rate of corporation tax will increase to 25%. Without a change to the bank surcharge, the rate of tax for banks would be 33% – with the proposed change it will be 28%. That means from April 2023, the rate of tax for banks will increase by 1% from the current 27% to 28%. At no stage does the banks’ rate fall to 22%.
They are of course therefore not suffering the full 6% tax rise that other companies will face in 2023 and the Treasury is passing up tax it could arguably be raising – which goes into your point about UC.
Do you really think rates are going to rise?
No one I know does
But I did not state my assumption, I agree