Charities are calling for a new tax on bankers’ bonuses to protect their services for the sick and vulnerable from government funding cuts.
Sir Stephen Bubb, chief executive of Acevo – which represents 2,000 charity leaders in Britain – said a levy was needed to prevent thousands of organisations from closing or scaling down operations.
In an interview with The Times, he suggested the billions of pounds raised could be channelled straight into the Big Society Bank set up by the coalition to encourage social enterprise.
Charities would then be able to bid for the funds to help to fill the gap left by the estimated £1 billion being shaved off local government grants, Sir Stephen argued.
Sir Stephen said: “The £500 million in cash reductions we’ve seen so far in the voluntary sector are merely the first signs of a gathering tsunami of ill-considered cuts which threatens to decimate the third sector, wreaking havoc on our communities.”
He added: “If some local councils continue with this Neanderthal approach to cuts, we will be setting a time bomb of social need, which first the most vulnerable in society and then ultimately taxpayers will pay for.”
Last year former chancellor Alistair Darling raised around £3 billion for the Treasury by imposing a one-off, 50% tax on bonuses over £25,000.
A new levy could raise a similar amount. But George Osborne has so far resisted taxing bonuses for fear of pushing financial institutions overseas.
The chancellor has introduced a separate permanent levy on banks’ balance sheets, which is expected to raise £2.5 billion.