Surcharge is unfair on smaller banks, say smaller banks
The head honchos at some of the UK's smaller banks are meeting up with the Treasury to tell them how unfair everything is. Particularly, the thing they're aggrieved about, is the new surcharge they'll have to pay on profits.
In the Budget, it was announced that banks are going to have to pay an 8% tax charge on profits of more than £25m. This kicks off next year. The bank levy which applies to larger banks is going to be reduced, and the smaller players in the market are not happy.
The smaller lenders say that this levy affects their ability to lend money to people, and they'd like to see this new ruling reformed.
"The only way to address the too-big-to-fail problem is to foster the development of smaller banks," said Paul Lynam, the chief executive of Secure Trust Bank. He thinks that big banks have an unfair advantage.
"The amount of capital that the smaller banks are required to hold, relative to the larger banks, is disproportionately punitive," he added.
Chancellor George Osborne thinks all this is good for competition though, and generally isn't listening to the smaller companies. Although, the big players aren't too thrilled either, with HSBC and Standard Chartered previously complaining that they've been penalised, because the levy applies to operations abroad, as well as on these shores.
As a result, a number of banks are threatening to move their headquarters overseas.
Banks eh? They're the ones that got everyone in this mess and now they're spending all their times bitching and griping. Whether they've got a point or not, it is little wonder everyone is trying to ignore them.