Clegg: Turner's bank tax is "unworkable"

by Stephen Tall on August 28, 2009

The BBC tells us:

Lib Dem leader Nick Clegg has queried the “workability” of a suggested tax on banks to curb excessive bonuses. Lord Turner, head of the UK’s finance watchdog, has suggested taxing banks’ financial transactions. The Treasury has urged restraint on bonuses but stressed taxation was a matter for the chancellor. Mr Clegg said the idea had practical pitfalls but agreed with Lord Turner’s “sentiments” and said that some banks needed to be broken up. …

Mr Clegg said there were real questions marks about the “workability” of a UK-only bank tax, given that most banks operated across national borders and in many countries. “It has been debated for many years and it has a lot of practical problems,” he told the BBC. But the Lib Dem leader said he agreed with the “sentiments” expressed by Lord Turner, in a recent interview, that some bank business was not socially productive. “We over-relied on the City of London for too long and it became too big, too unstable and a lot of what the bankers were doing was of little social value to the rest of the UK.”

The rights and wrongs of Nick’s stance are debated over at Darrell Goodliffe’s Moments of Clarity blog, and at Jonathan Calder’s Liberal England blog.