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Budget 2015: Lloyds and B&B asset sell-off to slash national debt
George Osborne announced in the Budget that the government would sell off £13bn of mortgage assets held by bailed out banks Bradford & Bingley and Northern Rock.
The chancellor said the money would be used to help pay down national debt.
Since UKAR’s formation in 2010, the government has made a total £12bn of repayments to taxpayers. Its remaining debt stands at £36.7bn.
Osborne (pictured) also confirmed the government would offload a further £9bn in Lloyds Banking Group shares.
Meanwhile, the chancellor announced that the bank levy, an annual tax on the value of all the debts in UK banks, is to be raised from 0.156% to 0.21%. The move will raise £900m a year.
The levy was first introduced in 2011, to both raise money and also discourage banks from risky borrowing. The new rise will be in the 2015 Finance Bill and take effect on 1 April.
The first £20bn of banks’ borrowing is exempt from the levy, as are ordinary retail deposits, which are guaranteed by government debt.
Unsurprisingly, the move was not welcomed by the banking industry.
British Bankers’ Association (BBA) chief executive Anthony Browne said banks in the UK already pay more than £40bn in taxes each year.
“The bank levy imposes a significant cost on banking businesses in the UK, which is making many banks move work and jobs to other parts of the world, and is deterring international banks from investing in the UK. This major increase in the bank levy is likely to accelerate that process and damage the competitiveness of the UK economy.”
