Levy on the banks to increase

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The bank levy was yesterday increased by the Chancellor so that the banks “could support the country in recovery”.

Making his announcement, Mr Osborne stressed that the country had stood behind the banks during the financial crisis.

Mr Osborne said that from January 1 next year, the rate of the bank levy will rise to 0.156 per cent and its base will be broadened.

The levy will raise £2.7bn in 2014-15 and £2.9bn each year from 2015-16.

Ed Salvesen, of Brewin Dolphin, said: “The large banks anticipated this measure and hence the lack of rapid change in the share prices.”

Gareth Quested, a researcher with the Big Innovation Centre, a joint venture between the Work Foundation and Lancaster University, said: “The raising of the bank levy from 0.142 per cent to 0.156 per cent, along with measures to widen its tax base, are unlikely to have any material effect on the banking sector.

“For the financial sector to effectively help the wider economy, we need a greater focus on creating new banking business models and ways to better finance innovative firms.”

A British Bankers’ Association spokesman said: “The banks are absolutely committed to meeting their tax obligations, including the revised bank levy.”