The cheaper bus fares will have to be paid for. So will the modest cut to electricity bills, along with the shelters to end rough sleeping. The new prime minister Andy Burnham has made plenty of extra spending pledges during his first few days in office, but, some creative accounting aside, has said very little about how it will all be paid for.
Still, never mind. The major banks have helpfully reported bumper profits, and Barclays has even had the gall to pay out bumper bonuses to the people who made them. Burnham could just slap an extra levy on them. Problem solved. Except if he does so, he will also do huge damage to what remains of the British economy.
It has been a good week for the banks. Today Lloyds reported £4.3 billion in pre-tax profits for the first half of this year, 23 per cent up on last year. Yesterday, Barclays reported pre-tax profits for the second quarter of £3.3 billion, up 31 per cent on last year, and half-year profits are up to £6.6 billion, a 16 per cent year-on-year rise.
Banking profits are highly cyclical
In a country that was serious about growth this news would, of course, be celebrated. After all, lots of successful companies usually means a successful economy. Unfortunately that is not true of Burnham’s Britain. As the results were announced, there were plenty of calls for an extra tax to be levied on the financial giants. ‘Barclays’ bonanza profits show that banks can easily afford to pay more tax,’ Paul Nowak, the general secretary of the TUC, said.
