‘Axe £2.5bn levy on balance sheets to help banks pay cost of Vickers reforms’

An INFLUENTIAL member of the body probing the British banking sector has urged the UK government to axe the annual £2.5 billion balance sheet levy.

Bill Winters, part of the five-member Independent Commission on Banking (ICB), said any concerns that the recommendations would make UK banks uncompetitive against foreign owned rivals could be softened by tax cuts.

He argued that the potential £7bn-a-year cost to the industry from implementing the ICB report’s recommendations could be partially offset by scraping the annual balance sheet levy.

“It is absolutely within the power of the government to do other things to make Britain a more attractive place to do business for international and domestic banks,” Winters told a round-table meeting hosted by the Financial Times.

“There are a [number] of tax policies – bonus taxes, balance sheet levies – that came into place after the financial crisis.

“To the extent we believe that we’ve succeeded in putting a structure in place that removes the subsidy from the taxpayer, it is time to roll back some of those other policies – and roll them back in a way that makes Britain a more attractive place for new investment,” Winters said.

The government said it had no plans to reconsider the levy.