Chancellor's bonus 'supertax' seems doomed to failure

12.15.00pm GMT Wed 6th Jan 2010

Commenting on reports that Alistair Darling's bonus 'supertax' has failed since many institutions are planning to absorb the charge rather than reduce bonuses, Liberal Democrat Shadow Chancellor, Vince Cable said:

"When even the Chancellor's closest allies are admitting that this tax will have no effect on the culture of bonus payouts, it would seem that this initiative is doomed to failure.

"The best way to deal with bonuses and achieve a fair deal for the taxpayer, who guarantee these institutions, is for the banks to pay a 10% levy on their profits.

"This is a much more effective solution than a one off windfall tax and recognises the debt that the banks owe to the taxpayer."