The Government is today publishing its response to the report by the Independent Commission on Banking (ICB), which sets out plans to fundamentally reform the structure of banking in the UK. This response agrees with the ICB’s recommendations and outlines how the Government will legislate to create a stable banking sector that supports lending to businesses and families, and removes the implicit taxpayer guarantee in the event of a bank failure.
The Government will implement the ICB’s advice in stages with the full package of reforms completed by 2019. All necessary legislation will therefore be put in place by the end of this Parliament. The Government will publish a White Paper in spring 2012 setting out further detail on how the recommendations will be implemented; in advance of that, the Government is open to views on how to implement these plans.
“The Independent Commission on Banking was set up last year to look at what I have called the ‘British Dilemma’: how Britain can be home to one of the world’s leading financial centres without exposing British taxpayers to the massive costs of those banks failing.
The Government is preparing the most far reaching reforms of British banking in our modern history – our objective is to make sure what happened in Britain never happens again.”
The Government has issued a call for evidence as part of its consideration of the integration of the operation of the income tax and National Insurance contributions systems, announced at Budget 2011. This is a preliminary stage of consultation, and aims to build a strong evidence base on the burdens to employers of having to operate two different systems. Responses to this call for evidence will inform the Government’s proposals for reform, on which it will consult in the autumn.
The two systems are currently operated entirely separately and the Government believes that greater integration of the two has the potential to remove economic distortions, reduce burdens on business, and improve fairness for individual earners.
The call for evidence document poses 14 questions, the majority of which focus on the burdens employers and payroll professionals face in paying income tax and NICs through the Pay As You Earn system. For example, how much staff time and other resource is required to manage the systems, which aspects of the process currently work well and how often problems are encountered when calculating payments.