December 07, 2009

The banking industry today warned the Treasury that plans for a "supertax" on bankers' bonuses would damage the City's reputation as a financial centre and risk an exodus of companies abroad.Angela Knight, the chief executive of the British Bankers' Association (BBA), said: "We need to think not just about the individuals but about the business that will be done elsewhere. "We need to think about the message this will send outside the UK about Britain being a place to do business in."

It emerged at the weekend that Alistair Darling is preparing to introduce a punitive new tax on bankers' bonuses in his Pre-Budget Report on Wednesday. He is expected to argue that because billions of pounds of public cash has been used to bail out the financial sector, taxpayers have a right to a larger share of bankers' payouts.Another idea being mooted is that banks would be forced to make higher employer National Insurance contributions.