Prof Philip Booth comments on the government's latest proposals
“Increasing and extending this levy at this time is clearly a political decision – but it is bad economics. Financial services are something this country has successfully specialised in – it is something we are good at – and further seeking to penalise it for political gain is dangerous.
“The government has set up the Independent Commission on Banking for the purpose of creating mechanisms whereby banks can fail in an orderly fashion, without bringing the whole system down and requiring taxpayer bailout. Yet this increased levy is supposedly being imposed in order to contribute towards a potential future bailout – the very thing these mechanisms will guard against. The government’s policy on this is completely incoherent.
“The government would do better focusing its efforts towards cutting regulation and red tape, and allowing growth to return to the economy, rather than creating further uncertainty in the banking and financial services industries.”
NOTES TO EDITORS
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