Barclays chief expresses concern for bank tax

| October 26, 2010
Barclays chief expresses concern for bank tax

Barclays president Bob Diamond has warned of the dangers that new taxes could have on British banks.

The American multi-millionaire, who is set to take over the chief executive role from John Varley next year, made the remarks shortly before the Bank of England unveiled proposals to overhaul the banking system.

In a speech at the CBI’s annual conference, Mr Diamond said that while he accepted calls for UK banks to “shoulder more of the tax burden”, he warned: “If this makes it more difficult to compete on equal terms with the best banks in the world, it will hamper out role in supporting the UK economy.”

He added: “Economic growth must now be the primary goal and economic growth depends upon a healthy and confident banking system.“

His comments come shortly after Chancellor George Osborne proposed a bank levy at his Comprehensive Spending Review last week, which is expected to bring in £2.5 billion a year, while Business Secretary Vince Cable, has recently suggested the reintroduction of a bonus tax.

Meanwhile, Mr Diamond believes that universal banks such as Barclays and Standard Chartered would face problems if the Government decided to introduce measures which would see the breaking up of banking giants.

Last month, Britain’s Independent Commission on Banking (ICB) said it was looking at ways to increase competition and choice among high street banks.

One option could see existing banking giants broken up and new names enter the industry, said the ICB.

However, banking industry experts have argued that splitting up banks could damage the UK’s reputation as a global financial centre.

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