Oral Answers to Questions

Clive Efford Excerpts

Tuesday 6th September 2011 Commons Chamber

The Chancellor of the Exchequer was asked—

[Clive Efford (Eltham) (Lab)]

1. What recent assessment he has made of the level of taxation levied on the banking industry.

[The Chancellor of the Exchequer (Mr George Osborne)]

Her Majesty’s Revenue and Customs published details of total pay-as-you-earn and corporation tax receipts from the banking sector for the first time on 31 August. The official statistics show that tax receipts from the sector increased from £17.3 billion in 2009-10 to £21 billion in 2010-11. A number of other taxes are incurred by the banking sector that the Office for National Statistics did not include in the figures, including the new bank levy introduced by this Government, which we expect will raise an additional £2.5 billion net each year, which is more in each and every year than the previous Government raised in their one-off payroll tax.

[Clive Efford]

I am grateful to the Chancellor for that answer, but the truth is that the High Pay Commission has just published a report demonstrating that high executive pay bears no relation to the performance of companies and that nowhere is this more starkly illustrated than in the banking sector. Meanwhile, youth unemployment is going up. Is it not time we made the banking sector pay its fair share in order to do something for the young unemployed in this country, as advocated by the Opposition?

[Mr Osborne]

That is why we introduced the bank levy, which Labour had 13 years to introduce but did not. It raises £2.5 billion. We are also taking action to clamp down on tax avoidance. We recently proposed a measure to tackle something called disguised remuneration, whereby high earners, often in the financial services sector, disguise their income to avoid tax, but the Labour party voted against the measure.