Osborne quells some dissent with his latest ruse

This morning’s newspapers would have made grim reading for the government. The Department for Transport has been forced to reverse its helicopter privatisation plan, there are doubts that the baccalaureate will suit Michael Gove’s education reforms and diverse packs of hounds have converged on the Big Society fox – and this is a cruel bloodsport. 

But, the master tactician has struck again. George Osborne’s sudden decision to raise an extra £800m through this year’s banking levy has relieved some pressure from the government. This is a minor operation by the standards of Osborne’s previous political coups, but it diverts attention and illustrates that the government is making some progress in the arduous slog against the banks. 

Certainly, £800m is not riches beyond the City’s dreams of avarice, as Chukka Umanna, Labour’s debonair attack-dog, is keen to express. Osborne describes the measure as a ‘fair contribution’ garnered from all banks, not just those controlled by UK plc. He is confident that his even-handed, pan-sector approach will inspire deals to boost lending and curb bonuses in the future, which would be of great value financially and politically. In the meantime, Osborne is content that he can both increase the banks’ tax bill and dictate reasonable terms. And, of course, it’s important to be seen to be doing something, especially with Ed Balls on the case later today.

The question now is: what will he do with the cash? There are manifold clamouring candidates for a meagre handout.