Umunna joins campaign for bank windfall tax
Chuka Umunna, Labour’s parliamentary candidate for Streatham, is a signatory of a new campaign to apply a windfall tax to bank profits.
He joins economists, journalists and other political figures in signing a letter put forward by the pressure group Compass, on whose management committee he sits, calling on the government to take action.
This follows a number of banks reporting huge profits recently in the latest round of announcements, including RBS being predicted to make £1.5 billion in profit this year and Lloyds Banking Group £2 billion.
We have also seen a return to the ‘bonus culture’ in banks, with a report last month by the Centre for Economics and Business Research (CEBR) finding that bonuses in the sector have risen by 50 per cent this year and are set to continue to rise over the next two years.
In 1981 Mrs.Thatcher levied a windfall tax on High Street banks, justified on the grounds that increased interest rates caused by the recession led to substantial unearned profits.
The banks’ recent profits have been made on the back of taxpayer-funded bailouts and Mr Umunna is calling on the government to tax the bonuses or directly tax the profits of banks to generate money which could be used in a more socially-useful way.
With unemployment continuing to rise as a result of the recession, the funds generated by a windfall tax could be ring-fenced to create thousands of new ‘green’ jobs desperately needed for the future, helping fight climate change at the same time.
This would also help ensure that our economy never becomes so reliant on the financial sector again in the future.
“Given that the taxpayer has bailed out the banks to the tune of £500 billion, it is wrong for bankers to continue rewarding themselves so hansomely.
“This ‘business as usual’ attitude has to stop, and applying a windfall tax is the best way to rein in banks’ behaviour and create new, sustainable jobs for the future.”
Mr Umunna is also backing the call for a high pay commission, which would investigate the effects of high pay and bonuses on our economy and society.
