Political boffin, keen fisherman looking forward to retirement.

Thursday, March 15, 2007

Windfall Tax on Bank Profits

The fat cat culture of the square mile has really gone through the roof under New Labour, unsurprising really from a party that now believes that wealth creation is far more important than wealth redistribution – and accepts Thatcherite individualism as fact.

City bonuses for FTSE CEO’s topped £9bn last year, and the average boss now earns over a 100 times than an average worker.

The UK’s top five banks (HSBC, Royal Banks of Scotland, HBOS, Barclays, Lloyds TSB) posted combined record profits of £38bn last year. A remarkable sum which has quite rightly drawn much criticism from consumer groups about punitive charges and low gains on savings.

I am delighted therefore to see Plaid Cymru proposing a windfall tax on these profits as part of its alternative budget proposals, especially as New Labour refuse to implement such a policy for the banking sector.

In 2000 the Treasury commissioned a report by Don Cruickshank to investigate banking profits. The report concluded that banks at that time were making ‘super normal’ profits to the tune of £3-5bn.

It’s about time those still in the Labour party that harp on about socialism wake up and smell the bacon. Whilst Labour kowtow to big business, at least Plaid is wiling to tackle the greed and excesses of the square mile which is having such a distorting effect on the UK economy as a whole.

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