It used to be the North Sea that provided the Exchequer with its milch cow source of taxes; today it’s the City. Since the nadir of the financial crisis, the banking sector alone is estimated to have yielded an average of £40bn a year in taxes and levies, a sum equivalent to more than 6pc of the entire UK tax take last year. Adding in the plethora of business service industries that ride on the back of finance, and we are probably talking about nearer 10pc.
This is a source of revenue that Britain’s cash strapped government – still struggling with one of the biggest Budget deficits in the OECD - can ill afford to lose. Yet even the Tory led Coalition seems to be doing its level best to do so.
