I read a post on the British Politics blog which referred to the statement by an unamed bank official, on Channel 4 News, that “banks were not charities”. Now I agree with the original posting, that it is a bit rich that the same people who came with their begging bowls for a bailout, should now, having received what they wanted, make such a statement. On top of that, they threaten not to pass on any further interest rate cuts, even though they must know that the economy needs this type of monetary stimulus.
This had me thinking, under current rules, the banks are set for another win at the taxpayers expense. At the moment, the banks are making massive write-offs, this means that the government and therefore the taxpayer, will not receive any corporation taxes from the banks. Less tax receipts from the banks, means, ultimately, more will be needed from you and I. Now here is the rub, banks can quite legally carry over losses from one year to another, now given the size of their losses, they could end up not paying any form of corporation tax for several years.
So, not only will they have received taxpayers money to stay afloat, they will contribute nothing to the economy for several years to come. This may be perfectly legal, but it is completely unacceptable. I believe that the government should act now to prevent the banks and any other third party that has received taxpayer funding from being able to carry over past losses, to offset against future profits. Think about it, when we are all having to pay for the excesses of this government in higher taxes, the bankers will be coining it with large bonuses, brought about, in no small part, from the fact that they will not have to pay corporation tax.
It is unlikely that Gordon Brown & Co will be in government when this happens, but at the very least, he should start the ball rolling and David Cameron needs to come out of his shell and insist that something is done. The banks effectively held us to ransom, when they embarked on high risk expansionism, requiring a massive injection of taxpayers funds as well as guarantees, they now intend to hold us to ransom over passing on any future interest rate falls, they must not be allowed to win again. For a government that simply revels in state control, perhaps they should consider getting some over the banks?
November 13th, 2008 at 3:21 pm
I read something similar a few weeks ago on an American blog. It is something that of course we kinda knew was coming but what has struck me as ever so slightly annoying (!!) is the lack of:
a) contrition
b) fairness
from the banks. We bail them out, they shaft us. I expect a letter from my bank soon saying my account charges are going to go up. I would have hoped that ANY government who had to bail out the banks would have put in place caveats to ensure that the tax payer got IMMEDIATE value and return for their money in the shape of pass-on clauses and freezes of fees.
Of course banks are not charities but NEITHER are the British Taxpayer and the sheer arrogance of these “Merchant Bankers” puts me in mind to invest in shares of hemp (the rope type)….we are coming for you someday soon….
I suspect NONE of the LibLabCon lot would have put restrictions on the banks because “banks are businesses and must operate freely in a free market” but if that argument is allowed to hold sway then they should have been allowed to freely fail. Yes our money would have been lost (most of it) but I would rather see banks fail and executives tried for corporate negligence, fraudulent accounting and theft than see them sitting high and dry, laughing at us and making THREATS at us.
Oooh, it makes me angry.
And what about the Gas Companies - where is OFGEN when it comes to getting them to DROP their prices with the same speed with which they raised them???
This country sucks AND blows…we NEED a revolution.
Pax
November 13th, 2008 at 4:31 pm
Shrewdy: I wasn’t aware that the USA had the same rules, but I guess it makes some sense, which makes change from anyy semblence of commonsense from this government when it comes to fair play with the public. As always, it seems that the bad guys get away with it, whilst the rest of us pay!