UK insists it won't be bullied by banks' demands over taxes
Published 20/12/2010 | 05:00
UK business secretary Vince Cable has said that the British government won't be "bullied" by banks threatening to leave the UK for more favourable tax regimes and called for "real restraint" over bonus payments.
Executives from Britain's four largest banks -- Royal Bank of Scotland, Lloyds, Barclays,and HSBC -- will meet Mr Cable and Chancellor of the Exchequer George Osborne this week.
"We're not going to be bullied," Mr Cable said on the UK's banks. "I meet all kinds of companies who say 'give us something or we'll go somewhere else' but you can't just give in the whole time."
Mr Cable repeated the government's threat to take "robust action" to tackle a lack of pay restraint with a possible further tax on banks. He declined to "spell out the detail" of what form any levy would take.
"I think it's fair to say that the bankers do understand the seriousness of the problem," added Mr Cable. "They've come forward with initiatives already. They've put more money into equity funding for medium-sized companies, they've suggested a bankers' code. They do understand that something has to happen; we can't go through the winter season of bonuses without real restraint."
He said that banks had a duty to society.
"If they fail to take account of their wider responsibilities, the government has the possibility of some form of taxation," he warned.
The UK government will introduce a £2.5bn (€3bn) levy on bank balance sheets next month. (Bloomberg)