A windfall tax on bonus payments to highly paid City bankers was under consideration at the Treasury today as the government prepared to announce Whitehall efficiency savings worth £3bn.

The chancellor, Alistair Darling, is looking at bonuses but has ruled out a tax on bank profits of the sort Labour levied on the privatised utility companies in 1997.

The Treasury is concerned that a windfall tax on profits would hit the capital position of banks at a time when the government is eager that they should rebuild their finances after the losses suffered over the past two and a half years.

Government sources said that a decision had yet to be taken and Darling would make up his mind during the next 48 hours.

…more at The Guardian

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