It has been reported that Chancellor of the Exchequer George Osborne plans to introduce a bank tax in his first budget, which will be unveiled this Tuesday. A unilateral introduction of such a tax has been under increasing scrutiny with critics arguing that such a move would have to be coordinated with other countries and made only if others followed the same regulatory strategy.
According to the Sunday Times, the bank tax could raise as much as US$4.5 billion.
The emergency budget will also give the details of the “tough and painful” spending cuts promised by the new government to reduce the UK’s massive budget deficit and slash its sovereign debt. The cuts and tax increases are expected to top £30 billion, while the cuts in the current year have amounted to £6 billion. Once the economic austerity measures are announced, the growth forecasts for the UK are expected to be adjusted and most likely reflect lower growth rate than previously envisioned. The Office for Budget Responsibility reduced its growth forecasts from 3.25% to 2.6%, while also cutting its forecast for borrowing by £20 billion.
Osborne has remarked that the cuts will save the country from “ruin.”
In the latest update on the Deepwater Horizon oil spill, which has so far nearly halved BP’s (LON:BP) share price, Chief Executive Tony Hayward will now resign from his role in leading the company’s efforts to contain the spill and return to London. He will be replaced by BP’s current Managing Director American Bob Dudley, who has previously served as Chief Executive of the company’s Russian joint venture TNK-BP.
Meanwhile, Hayward made yet another ill-advised move this weekend to anger the US government and residents of the US states adjacent to the Gulf of Mexico that are suffering from the massive oil spill caused by an exploration of a BP-operated deepwater drilling rig. Hayward was seen at a yacht race on the Isle of Wight shortly after participating in a Congressional hearing on the oil spill, where he had to take a lot of heat for BP’s handling of the crisis.
Hayward has previously remarked that he “wanted his life back” and later had to apologize to the families of the 11 workers killed by the explosion that resulted in the spill. The oil is expected to be leaking until August, when BP will conclude the drilling of a relief well. It has been estimated that BP is currently capturing two thirds of the oil leaking out of the well.