THE GUARDIAN: • Lord Oakeshott calls for immediate tax • £7bn expected to be paid out in bonuses this year • RBS chairman says regulation the only route to reform
A new, more draconian tax on bonuses should be slapped on banks, a leading Liberal Democrat said tonight after the Royal Bank of Scotland chairman admitted that regulation was the only way to restrain the annual bonanza for bankers.
Amid estimates that the City would pay out £7bn in bonuses this year, Lord Oakeshott said the moment had now come to reintroduce a tax on bonuses which, when imposed on the banks last year, brought in £3.5bn for the exchequer.
Oakeshott, a Lib Dem Treasury spokesman, said that the situation was so grave that the government would need to act ahead of the report next year by its independent commission on banking – chaired by Sir John Vickers.
Speaking after David Cameron acknowledged the public's "anger" over bonuses, Oakeshott said: "As the prime minister has made clear, the banks are still paying ever bigger bonuses and not lending to small businesses.
"The answer must be to take immediate action on bonuses and the obvious way is to have a much tougher bonus tax than Labour's feeble feather-duster and much stricter net lending targets to small and medium-sized businesses while we wait for the banking commission to recommend more radical reform." >>> Jill Treanor | Tuesday, October 05, 2010
