George Osborne announced cuts to the levy in 2015 after big banks threatened to move their headquarters outside the UK [Image: Odd Andersen/AFP/Getty].

The problem with the banks’ ultimatum and the way George Osborne – and now Philip Hammond – caved in to them is the innate unfairness.

Those of us who didn’t vote Conservative and were penalised by their punitive cuts can’t threaten to leave the UK in the same way as these banks, can we?

If we did, I think the Tories might dig out some pretty nasty ways of keeping us in our place!

But they placate the banks.

My personal preference would have been to tell them to go – but that all their UK-based assets, at the time of their announcement, were now the property of the Crown, to be divided up according to the needs of the British people.

They would be allowed to go, but the economic benefits they had created for the UK must stay.

I know what you’re thinking: “Dream on”. It is a dream – but only because politicians like Messrs Osborne and Hammond are the poodles of private enterprise.

How would you counter such ultimatums by big, possibly multinational, firms?

John McDonnell, the shadow chancellor, has accused Philip Hammond of failing to cancel a “tax giveaway” by his predecessor to Britain’s biggest banks, worth more than £1bn this year.

In his summer budget after the 2015 general election, the then chancellor George Osborne announced deep cuts to the bank levy, which was introduced after the financial crisis and charged according to the size of banks’ balance sheets.

Big banks, including HSBC and Standard Chartered, which felt penalised by the levy, told him that they could move their headquarters outside the UK.

Osborne announced phased cuts in the levy over the parliament and made up the shortfall in revenue by imposing an 8% surcharge on banks’ corporation tax, which falls on all lenders, not just the largest.

McDonnell said by failing to reverse the cuts in the bank levy in November’s autumn statement, Hammond was handing the big banks a rebate taxpayers could ill afford.

The latest forecasts from the independent Office for Budget Responsibility, published alongside the autumn statement, showed revenue from the bank levy at £2.7bn for the current financial year, instead of the £3.8bn expected last March, before the general election.

Source: Chancellor failing to cancel ‘tax giveaway’ to banks, says Labour | Business | The Guardian

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