Banking bonuses tax 'under consideration in the UK'

7 December 2009

A windfall tax on bankers' bonuses is being considered by UK chancellor Alistair Darling, according to government sources.

With public anger against the financial sector growing throughout Britain and a general election looming next year, the move could increase Labour's popularity at the polls while also helping to raise hundreds of millions in tax.

But Mr Darling is worried that such a levy may hit the capital position of banks at a time when the government hopes to improve the UK's financial position in a bid to restart the economy.

Insiders told the Observer that Mr Darling will make his decision after consulting with prime minister Gordon Brown by the end of today (December 7th 2009).

The public will learn of his verdict in his Pre-Budget Report, which is to be unveiled to parliament on Wednesday.

Last month, the UK government put forward the Financial Services Bill, which gives regulators the power to veto employment contracts and stop guaranteed end-of-year bonuses.

By Claire Archer

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