Labour’s John McDonnell said the chancellor is offering the financial industry an ‘ever more soft touch’ through various regulatory concessions

Shadow chancellor John McDonnell has accused George Osborne of being too close to Britain’s top bankers, offering the industry “an ever more soft touch” through a series of regulatory concessions that have emerged in recent weeks.

Over the weekend it was reported by Reuters that two more investment banks with major operations in the City -; Citigroup and Credit Suisse -; had paid no tax for 2014 in the UK.

It follows Reuters analysis last month that showed a further seven banks had paid a combined £21m in UK corporation tax in 2014 despite generating UK profits of £3.6bn.

“These are damning findings that make a real mockery of the government’s approach to taxation of the financial sector,” said McDonnell. “This news will also be completely disheartening to the millions of us UK taxpayers who bailed out the banks and continue to pay the price for their past actions and excesses.”

Last week, McDonnell had again attacked Osborne after City regulator the Financial Conduct Authority (FCA) dropped a long-awaited review of banking culture which had been promised in the wake of multiple scandals. The decision to abandon the review followed the resignation of the FCA chief executive, Martin Wheatley, after the chancellor had forced him out in July.

The Treasury has insisted it had no hand in the regulator’s decision, but McDonnell renewed his criticism.

“The chancellor has been moving towards an ever more soft touch approach by reducing the bank levy and cutting corporation tax, selling publicly owned banks off at a loss, and only last week he sat by while the watchdog he set up watered down its review into the sector, only six months after he replaced the head of the FCA for issuing large fines to banks.”

The Guardian Sunday 3 January 2016

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