Former chancellor admits bank bonus tax failed

The one-off tax on bank bonuses introduced last year by the Labour government did not work, Alistair Darling has admitted.

According to the Financial Times, the former chancellor told delegates at a financial services conference sponsored by investment bank Nomura that the policy did nothing to change behaviour in the banking industry.

He claimed that "imaginative" financiers simply came up with ways to avoid the 50 per cent levy, which was charged on individual bonuses of more than £25,000.

As a result, it is unlikely that the new coalition government will reinstate the tax, the former occupant of Number 11 Downing Street stated.

"I think it will be a one-off thing because, frankly, the very people you are after here are very good at getting out of these things," he remarked.

In his last Budget speech as chancellor, in March this year, Mr Darling announced that the bonus tax had raised £2 billion for the Treasury.