CBI: Tax raid on bankers will hit customers

CBI director general Richard Lambert today warned against a fresh political attack on bankers and said customers would bear the brunt of any fresh tax raid on the sector.

In a speech at Bloomberg, Lambert said politicians had "successfully deflected" their share of the blame for badly designed policy in the run-up to the crisis and added their "first responsibility is to stop making matters worse".

He said: "Take the suggestion that because the bankers caused the crisis, they should be made to put things right through a much higher banking levy.

"Who would actually pay for such a penalty? Those overpaid City dealers? Maybe, a bit. But the main burden would inevitably be carried by the banks' customers."

Lambert warned a further £10 billion tax hit to the banking sector could knock £50 billion off UK lending but also called on the industry to show pay restraint to help restore trust.
"The combination of pay freezes and job losses in the public sector with large bonuses in the City would be toxic in the extreme," he warned.
He added: "This exceptional combination of circumstances will require exceptionally sensitive handling, preferably with the major global institutions acting collectively when it comes to compensation matters, and resisting the temptation to poach disaffected mega-stars.
"This is no easy matter. But the political costs of failing to agree a global ceasefire are likely to be substantial."