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Banks: Government Assistance

Answer

Since the introduction of the bank levy in 2011, total revenue raised by the (a) Bank Levy and (b) Bank Corporation Tax Surcharge up to an including 2020-21 can be found in the ONS monthly public sector current receipts publication.

https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/datasets/appendixdpublicsectorcurrentreceipts

These taxes were introduced to ensure that banks make a fair and sustainable contribution, reflecting the risks they pose to the financial system and wider economy. Further measures have also been taken to raise revenue from the sector including a restriction on tax relief for banks’ historic losses and PPI compensation payments.

As a result of the 2007-2008 financial crisis, the Government made a number of interventions in the financial sector with the objective of protecting the financial stability of the UK economy.

In each Economic and Fiscal Outlook, the independent Office for Budget Responsibility (OBR) publishes estimates of the net direct effect of these financial sector interventions on the public finances. The latest estimates are set out in Table B.1 of the October 2021 publication:

https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/

The OBR’s estimates do not attempt to compare against a counterfactual scenario where the Government did not intervene. However, as the OBR sets out, the costs of the financial crisis would almost certainly have been much greater in the absence of direct interventions to restore the financial system to stability.

Secondary information

Type

Written question

Reference

75106

Session

2021-22

Subjects

Corporation tax Banks Finance Government assistance Surcharges Bank levy

Contains statistics

Yes

Link

View this Written question on www.parliament.uk