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New tax will prevent any future crises vows Cable

Britain is prepared to press ahead alone with a tax on banks to insure against future collapses, Business Secretary Vince Cable has revealed.

Mr Cable said support for such a scheme was already part of the coalition Government agreement, adding: "The more countries that join, the better."

He also stated that the exact way the revenue from such a levy should be used was "still up for grabs", though the government would have reservations if such a fund were to be collected in a centrally-managed fund. The provisional Commission ideas suggested that the proceeds of a bank tax would be collected and administered by national governments.

Officials are doubtful about the effectiveness of such a scheme unless accepted across Europe and beyond, including in America, to ensure a level playing field.

But Mr Cable said the government had "an open mind" about the scope of the scheme, and was prepared to press ahead with a national tax in any case. It could be raised on bank profits "or other denominators," said the Business Secretary.

The preliminary Commission plans envisage legislating on a levy by 2011, and including provision to prevent banks passing on the cost to customers.

Mr Cable said the new government was fully behind measures to extend the EU single market, which was "clearly incomplete", and to cut EU regulation. "The single market has an absolutely key role to play," he said.