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| Lib Dems want extra £1bn bank levy to cut deficit | Lib Dems want extra £1bn bank levy to cut deficit |
| (about 11 hours later) | |
| Britain's banks should be taxed with an additional £1bn levy in order to help pay off the deficit, the Lib Dems say. | Britain's banks should be taxed with an additional £1bn levy in order to help pay off the deficit, the Lib Dems say. |
| Danny Alexander is to set out details of the plan, which would effectively strip banks of the benefit of recent corporation tax cuts, on Monday. | Danny Alexander is to set out details of the plan, which would effectively strip banks of the benefit of recent corporation tax cuts, on Monday. |
| The Treasury secretary is pushing for it to be included in Chancellor George Osborne's budget later this month. | |
| If he does not succeed it will be included in the Lib Dem election manifesto in May. | If he does not succeed it will be included in the Lib Dem election manifesto in May. |
| The Lib Dems and Conservatives are both committed to a further £30bn of fiscal "consolidation" in the new Parliament to clear the deficit in the public finances by 2017/18. | The Lib Dems and Conservatives are both committed to a further £30bn of fiscal "consolidation" in the new Parliament to clear the deficit in the public finances by 2017/18. |
| Spending cuts | Spending cuts |
| But unlike the Tories - who say they would do it through a combination of spending and welfare cuts and a further clampdown on tax avoidance - the Lib Dems say they would seek to raise at least £8bn through additional taxes. | But unlike the Tories - who say they would do it through a combination of spending and welfare cuts and a further clampdown on tax avoidance - the Lib Dems say they would seek to raise at least £8bn through additional taxes. |
| The Lib Dems want to impose an additional 8% rate of corporation tax on UK banks, which they say will raise an extra £1bn a year towards cutting the deficit. | |
| The proposed supplementary charge is intended to remove a series of reductions in corporation tax since 2010 from the banks - and would be in addition to the existing bank levy. | |
| Labour has said it will clear the deficit by the end of the next Parliament through a combination of spending cuts and tax increases on the assets and incomes of the better-off. | Labour has said it will clear the deficit by the end of the next Parliament through a combination of spending cuts and tax increases on the assets and incomes of the better-off. |
| Shadow chancellor Ed Balls has said Labour will increase the annual tax on bank profits introduced by Mr Osborne in 2010 by £800m a year to fund more free childcare for parents of three and four-year-olds in England. | |
| He has also outlined plans to raise up to £2bn from a tax on bankers' bonuses during Labour's first year in office, if it wins May's election. | He has also outlined plans to raise up to £2bn from a tax on bankers' bonuses during Labour's first year in office, if it wins May's election. |
| 'Great crash' | 'Great crash' |
| Danny Alexander said the banks had recovered sufficiently to make a contribution to deficit reduction on top of the existing bank levy. | Danny Alexander said the banks had recovered sufficiently to make a contribution to deficit reduction on top of the existing bank levy. |
| He said: "Failings in the banking system were a major factor in the great crash of 2008. That is why we have always insisted that the banks help fund repairing the economy." | He said: "Failings in the banking system were a major factor in the great crash of 2008. That is why we have always insisted that the banks help fund repairing the economy." |
| "To that end, we introduced the Bank Levy which is on track to raise £8bn in this Parliament. | "To that end, we introduced the Bank Levy which is on track to raise £8bn in this Parliament. |
| "With the final stage of deficit reduction requiring around £30bn of savings, it would be totally wrong for all of that to be found from cuts to public services as the Conservatives propose. | "With the final stage of deficit reduction requiring around £30bn of savings, it would be totally wrong for all of that to be found from cuts to public services as the Conservatives propose. |
| "Liberal Democrats believe that we must balance the books and do so fairly, so it is only right to reconsider whether banks are making a fair contribution to deficit reduction. This tax would remain in place until that job is complete. | "Liberal Democrats believe that we must balance the books and do so fairly, so it is only right to reconsider whether banks are making a fair contribution to deficit reduction. This tax would remain in place until that job is complete. |
| "Many banks were left seriously weakened after the crash. But as a result of our comprehensive range of reforms, and the strong economic recovery, the banking sector is now returning to health and profitability. | "Many banks were left seriously weakened after the crash. But as a result of our comprehensive range of reforms, and the strong economic recovery, the banking sector is now returning to health and profitability. |
| "So now is the right time to ask the sector to contribute a little more to help us balance the nation's books. That's the right way to keep our strong economy on track, and build a fairer society too." | "So now is the right time to ask the sector to contribute a little more to help us balance the nation's books. That's the right way to keep our strong economy on track, and build a fairer society too." |