Britain should tax bank bonuses and give the proceeds to charities to help cushion them from funding cuts that will hit elderly and disabled people, a leader of the charity sector said on Saturday. Stephen Bubb, chief executive of the Association of Chief Executives of Voluntary Organisations (ACEVO), representing 2,000 British charity leaders, said charities faced funding cuts of up to 5 billion pounds ($7.74 billion) over the next two to three years.
Local councils are cutting grants to charities as Prime Minister David Cameron's coalition government slashes public spending to curb a budget deficit of more than 10 percent of national output. "We are suggesting that this government needs to put a tax on the most recent bonuses in the City (banking sector) which some commentators are estimating at around 7 billion pounds," Bubb told Reuters.
He noted that a one-off tax on bank bonuses introduced by former finance minister Alistair Darling last year had raised more than three billion pounds. "So if there was another one-off tax at 50 pence, that would bring in over three billion pounds which would go a long way to making up for the cuts that charities are going to be experiencing," he said.
"Otherwise the cuts ... will hit the old, will hit the vulnerable, disabled people. That's already happening," he said. ACEVO wants the proceeds of a one-off bonus tax to be paid straight into the "Big Society Bank" that Britain's coalition government plans to set up this year to support its goal of expanding the voluntary sector and encouraging people to take more responsibility for their lives.
The Big Society Bank is to be funded with money from dormant bank accounts and private investors. The bonus issue has divided the eight-month-old coalition government with the smaller Liberal Democrats, led by Clegg, seen as more favourable to tougher action on bank bonuses than the dominant Conservatives are.
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