That was the verdict in bank boardrooms when they learned that John Healey was making them pay an extra three per cent surcharge on top of the tax they already pay on their profits.
asserted
they → learn → profits
They must hand over 25 per cent of their profits in corporation tax plus an existing three per cent surcharge, which for 15 months, becomes six per cent.
asserted
which → hand → months
That seems like a lot and it is, but the banks were braced for having to cough up even more.
asserted
banks → seem → lot
That six per cent is still less than the initial surcharge rate of eight per cent imposed by the Conservatives in 2016.
asserted
cent → impose → 2016
It went down to three per cent, now it is creeping up again, but only for a limited period.
asserted
it → go → period
The move had been well-trailed.
asserted
move → trail → ?
Equally, the banks had received reassuring words from Healey.
asserted
banks → receive → Healey
He repeated them in his Budget when he paid tribute to their “world-leading contribution to the country”.
asserted
he → repeat → country
The banks, and for them read the City-at-large, were entitled to feel hard done by.
asserted
banks → read → City
Yet again, the financial services industry had been singled out; yet again, the UK and London’s successes, as Healey himself portrayed them, had been made to suffer for that success.
asserted
Healey → single → success
In cost terms, the additional charge will not hurt much.
asserted
charge → hurt → terms
Healey was able to strike because the banks have been making whacking great profits — HSBC this week announced a 32 per cent rise in profits for the three months to September, of £7.14 billion, Barclays last week unveiled a 12 per cent increase in profits for the same period to £2.3bn.
asserted
Barclays → strike → 2.3bn
These are not annual sums, don’t forget, but quarterly.
asserted
These → forget → ?
Higher interest rates and inflation have seen the UK lenders making tonnes of money, hand over fist.
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lenders → see → fist
The banks made their case
asserted
banks → make → case
At the same time, the big UK banks have continued to close branches on high streets, relying more and more on technology and detaching themselves from ordinary people.
asserted
banks → continue → people
Against that backdrop, one exacerbated by the collective memory of the 2008 crisis, the subsequent long period of austerity and a perceived lack of contrition on the part of the banks, it is little wonder that the Government, encouraged by the trade unions, sees them as fair game.
asserted
Government → exacerbate → game
Indeed, it is tempting to speculate whether a Tory administration would have done the same.
asserted
administration → speculate → same
Given the paucity of suitable targets for public revenue-collecting, it probably would.
asserted
it → give → collecting
It is tempting to speculate whether a Tory administration would have done the same
One senior banker in particular made a case for their exclusion.
asserted
banker → speculate → exclusion
Jamie Dimon, boss of JP Morgan and the world’s leading banker, pushed hard on the benefits they bring, the investments they make and attract, the businesses they finance, the jobs they create.
asserted
they → lead → benefits
Dimon had a card of his own to play, which was the new £3bn tower his company intends to build at Canary Wharf.
asserted
company → have → Wharf
Mess with us, suggested Dimon, and you risk losing us, and with it a scheme that will boost the UK economy by £10bn.
uncertain
that → mess → 10bn
The danger as well was in the negative signal that would send to the international investment community.
asserted
that → send → community
Investors would be reluctant to commit their cash to a country where the Government treated their funding as a hole-in-the-wall ATM, to be withdrawn and spent as and when it pleased.
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it → commit → ATM
There is no doubt Healey listened to Dimon — they spoke and met more than once.
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they → be → Dimon
Others too, were heard and seen.
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Others → hear → ?
Ideally, the Chancellor would almost certainly have liked to exclude the foreign banks from the tax increase but practically that would have been difficult, if not impossible.
asserted
that → like → increase
Stocks rose after the address
The UK banks also lobbied.
asserted
banks → rise → address
Barclays’ chief, CS Venkatakrishnan, warned that a fresh bank tax would hurt growth and undermine plans to bolster the economy.
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tax → warn → economy
The industry body, UK Finance, said similar and pointed to other nations not requiring banks to pay such high taxes.
asserted
nations → say → taxes
The claim was made as well that while times may be advantageous now, that is not always so — bank profits are capable of falling.
uncertain
profits → make → ?
In Barclays’ case there was a subtext, which was that a new charge would hit their profits and therefore their stock market value, making them especially vulnerable to takeover.
asserted
them → be → takeover
As it was, Barclays shares rose 2.11 per cent on Healey’s news — a sure sign the City felt they had been let off lightly.
asserted
they → rise → news
To soften the blow, Healey has indicated he is leaning towards a lighter regulatory regime in the City.
asserted
he → soften → City
As was the absence of a concerted drive against the wealthiest folks in society — a step that would be viewed disdainfully by overseas investors.
asserted
that → view → investors
It didn’t happen.
asserted
It → happen → ?
That, plus the fact Healey made strenuous efforts to maintain every measure he took was fully funded, explained the muted but positive reaction on the markets as UK gilts and stocks generally rose after his address.
asserted
gilts → make → address
The extra three per cent, albeit temporary, is evidence of a direction of travel, that Healey, for all his praise, still felt emboldened enough to tax the banks.
asserted
Healey → feel → banks
He’s done it once, in this, his first Budget and he could easily do so again.
uncertain
he → do → this
…and 6 more, not listed.
The Aporia
