Have the UK banks got off easy?
Yesterday's recovery in banking share prices was very much an indication that investors and analysts believe the banking sector has effectively got off easy in George Osborne's first budget. There had been concerns that the UK government would introduce a banking levy to raise around £5 billion a year although in reality the new tax is unlikely to raise any more than £2.5 billion per annum. As a consequence banking share prices rebounded yesterday after an earlier sell off self just ahead of the budget.
When you consider that the banking levy is unlikely to raise any more than that an accumulated £8 billion between now and 2015 this really is a very small price to pay when you consider the £50 billion in taxpayer subsidies which the industry received at the height of the credit crunch. As a consequence, there is still anger amongst the UK public who are struggling to make ends meet while it looks as though the banking sector is back on the gravy train.
There is a growing belief that George Osborne could, or possibly should have, hit the UK banking sector for significantly more taxation in the short-term but then again there would have been a detrimental impact on the UK economic recovery.
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