Labour’s shadow chancellor Ed Balls has called on the government to levy a further £2 billion tax
on bankers’ bonuses – but the government has said it has no plans to announce such a tax at the
forthcoming budget.

Ed Balls told a press conference on Monday: “We are asking George Osborne to repeat the bank
bonus tax for a second year … and use the money to act now to build homes, to create jobs.”

The previous Labour government imposed a one-off tax on bankers’ bonuses that brought in £3.5
billion in 2010. However the current coalition government has opted not to levy the same tax this
year – instead implementing an ongoing bank tax designed to raise around £2.5 billion a year.

Labour is keen to see the bonus tax levied in addition to the direct tax against UK banks. They say
the money raised could be used to build 25,000 new homes, boost a regional growth fund and
create a special fund for youth jobs.

Chief executive Bob Diamond and two other senior executives at Barclays were last year paid £28
million pounds between them – in addition to shares worth £40 million. Public anger over such
remuneration for bankers remains high, and many political figures feel the compromises reached
under the Project Merlin bank deal didn’t go far enough in curbing bonuses.

However, the Treasury’s economic secretary Justine Greening responded that “That’s the deal that
we’ve done with the banks and we are not going to go further than that.”

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