Banks will be hit with an extra £1billion tax until the deficit has been completely cleared , under new Lib Dem proposals . The new 8 per cent levy - which effectively strips the banks of the benefit of the Government 's corporation tax cuts – will form a key plank of the party 's election manifesto . Treasury Secretary Danny Alexander said the tax hike will help the next Government find the £30billion of savings after the election needed to balance the books . The Lib Dem economic spokesman Danny Alexander wants to introduce a new 8 per cent levy on banks . Like the Conservatives , the Lib Dems are committed eliminating the deficit in the public finances by 2017/18 . But unlike the Tories - who say they would do it through spending cuts alone - the Lib Dems say they would seek to raise at least £8 billion through extra taxes . The annual levy on banks , which was introduced in 2010 , currently brings in around £2.5billion a year . Mr Alexander 's proposals are expected to take that up to £3.5billion a year . A 'mansion tax ' on homes worth over £2million will raise an extra £1.5billion , and a crackdown on tax avoidance could save £6billion , the Lib Dems claim . The Lib Dem economic spokesman said : 'Failings in the banking system were a major factor in the great crash of 2008 . 'That 's why we have always insisted that the banks help fund repairing the economy . 'To that end , we introduced the Bank Levy which is on track to raise £8billion in this Parliament . 'With the final stage of deficit reduction requiring around £30billion of savings , it would be totally wrong for all of that to be found from cuts to public services as the Conservatives propose . 'Liberal Democrats believe that we must balance the books and do so fairly , so it is only right to reconsider whether banks are making a fair contribution to deficit reduction . 'This tax would remain in place until that job is complete . ' The Tories and Lib Dems are committed eliminating the deficit in the public finances by 2017/18 . But the Lib Dems want to raise at least £8 billion through extra taxes , while George Osborne ( pictured ) insists it can be achieved through spending cuts alone . All the revenue raised from the new bank tax will go towards paying down the deficit . The Lib Dems will push for the measure to be included in the forthcoming Budget – but if the Tories resist , it will be included in the Liberal Democrat manifesto . Mr Alexander added : 'Many banks were left seriously weakened after the crash . 'But as a result of our comprehensive range of reforms , and the strong economic recovery , the banking sector is now returning to health and profitability . 'So now is the right time to ask the sector to contribute a little more to help us balance the nation 's books . That 's the right way to keep our strong economy on track , and build a fairer society too . ' Industry group the British Banking Association criticised the proposal , saying that banks in the UK already pay more tax than any other industry . Labour 's shadow treasury secretary Chris Leslie added : 'Nobody will trust what the Lib Dems say after they broke their promises on tax by raising VAT on families while giving millionaires a huge tax cut . 'Labour will introduce a tax on bank bonuses to pay for a jobs programme for young people . We 'll reverse this Government 's £3billion a year tax cut for the top 1 per cent of earners to help get the deficit down fairly . 'And we 'll increase the bank levy , which has raised over £2billion less than the Government promised , to pay for more free childcare for working parents . The Lib Dems have joined the Tories in opposing all these fair policies . '
Banks will have to pay a new 8 % annual levy until 2017/18 to clear deficit . Tax hike will help the next Government find £30bn of savings after election . Tories and Lib Dems committed to clearing deficit within three years . But Cameron has vowed to make all the savings through spending cuts . Lib Dems want at least £8billion of new tax rises , including a mansion tax .