What has Osborne done today?

In October last year, Osborne announced a new levy on banks’ balance sheets. It was 0.05 percent for this calendar year, before rising to 0.075 percent from 2012 onwards. But, today, the Chancellor has announced that the ‘introductory’ rate has been abolished – so banks will be charged the 0.075 percent rate on all liabilities. Here’s my nine-point Q&A, by way of delivering my take:

1) So, a retrospective tax? Not quite. He’s imposing a 0.05 per cent rate on balance sheets in January and February. But he’ll up the charge to 0.1 percent for March and April to compensate. It will go back to 0.075 percent in May. This is a move clearly intended to generate revenue, rather than change behaviour.

2) How much will he nab? The Treasury reckons today’s move will net £800 million this year – but this, of course, depends on how many of the globalised banks will keep their profits in London.