Balls calls for new bank bonus tax

Ed Balls today calls for a £2bn bankers bonus tax to help create 100,000 jobs for young people. The move would repeat Alistair Darling's successful policy.

Shadow Chancellor, Ed Balls, will today call for a £2 billion bankers bonus tax to help create 100,000 jobs for young people. The policy would repeat the successful tax introduced by Alistair Darling which the Coalition allowed to lapse.

An amendment to the Finance Bill, which Labour’s shadow Treasury team will push to a vote in the House of Commons this afternoon, calls on the Government to repeat the bank bonus tax introduced by the Labour Government last year. Labour believes a repeat of last year’s bank bonus tax, in addition to the permanent bank levy, would raise at least £2 billion this year.

The funds raised should be spent on creating over 100,000 jobs by:

– establishing a youth jobs fund;

– building 25,000 affordable homes; and

– supporting small businesses by boosting the over-subscribed regional growth fund.

Ed Balls MP said today:

“Keeping young people on the dole is not just a waste of potential but a waste of money too. That’s why, instead of giving the banks a tax cut this year, the Government should adopt Labour’s plan for a tax on bankers’ bonuses and use the money get young people into work and so help get the deficit down.

“After rising sharply in the winter, there has been a welcome fall in youth unemployment in recent months. But there are still almost one in five young people looking for work and I’m worried about the thousands of young people who will leave school or college this summer without a job or apprenticeship to go to.

“I hope MPs from other parties will do the right thing and support our amendment to stop another lost generation of young people, as in the 1980s when youth unemployment rose for four years after the recession was over.”

The bankers bonus tax was first unveiled by Alistair Darling in the Pre-Budget Report in December 2009 but allowed to lapse by the Tory-led coalition a year later. The 50 per cent tax on bonuses worth over £25,000 was expected to yield £550 million but ended up bringing in over £2 billion as bankers’ behaviour was unchanged.

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