Outrage at bank bonuses has isolated the City of London’s most loyal supporters. When Lord Turner, chairman of the Financial Services Authority, in August called for a Tobin tax on a swollen and often socially useless industry, the City’s political patrons termed the plan “crackers”. The mood has since shifted. The risk is that, with the government under pressure to outflank the Conservatives in its pre-Budget report, competitive populism transforms bank taxes into a political football.

Labour has ample political cover for a windfall tax if it wishes to introduce one. George Osborne, shadow chancellor, recently went out of his way to warn that banks who paid unreasonable salaries and bonuses out of money intended to strengthen their balance sheets risked retribution via the tax system. Even though the Tories opposed Labour’s 1997 windfall tax on privatised utilities, the fact that Margaret Thatcher’s government hit the banks in 1981 with a 2.5 per cent “special once-for-all tax” on deposits makes it hard for them to oppose a Labour levy on first principles.