Alistair Darling has insisted his supertax on bankers' bonuses was not designed to raise large amounts of revenue.
The Chancellor told MPs |the 50% levy would ‘not actually raise that much’ and was meant instead to discourage massive bonus payouts altogether.
Facing a grilling from the Treasury Select Committee, he warned some bankers needed to show they ‘live on the same planet as the rest of us’.
Banks claimed the new, one-off tax announced in the Pre-Budget Report would raise much more than the £550m predicted.
Mr Darling acknowledged that there was ‘resistance’ to the move but continued to exert pressure on banks to change their behaviour.
“I say to the bankers, you've got to help yourselves to get through this process, and that means if you want to get off the front pages for goodness’ sake show some of the restraint the public want you to,” he said.
“The reason we've introduced this measure — it's not a great revenue raiser, it doesn't actually bring in that much – what it does do though, I think, is send a clear signal that we need to change behaviour,” he concluded.
Meanwhile, Conservative MP, Michael Fallon demanded to know why Mr Darling had not admitted that the cost of servicing the UK’s £178m budget deficit could hit £60bn in the next four years.
Mr Darling did not publish estimates of the cost of interest on Britain’s national debt, saying that the Treasury only released forecast numbers on a three-year programme.
“Nothing has changed from this year to last year. We only publish what has been decided,” he said.
The cost of servicing the country’s national deficit this year is estimated to be around £30bn.