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From 9m ago Introduction: John Healey poised to raise taxes on banks in budget Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy. Britain’s banks may be ‘part of the jewel’ in the UK economic crown, as chancellor John Healey put it yesterday , but that won’t protect them from being hit in this month’s budget. John Healey is poised to tax Britain’s banks in his 28 October budget, the Guardian understands, as the chancellor looks to fix the damage inflicted on the public finances by war in the Middle East.
As my colleagues Heather Stewart, Jessica Elgot and Kalyeena Makortoff reported last night , Healey has decided to tap the financial sector for additional revenue. One option understood to be under discussion – reversing cuts to the bank surcharge made by Jeremy Hunt – would raise upwards of £2bn a year. Industry figures believe that will probably mean raising the surcharge back to 8%, from 3% at present, to help bolster the government’s fiscal headroom (which has been eroded by the jump in borrowing costs this year).
News of the looming tax raid came hours after Healey praised the banks as crucial to supporting economic growth, telling reporters: double quotation mark “People too often see them as big, distant financial institutions, when they are hardwired into the economic fabric of this country and our future prospects.” Banks sound resigned to being shorn at the budget, but they’re not happy about it. Banking sector trade body, UK Finance , warned that “further increases in bank taxes would weaken competitiveness, discourage investment and job creation, and work against the government’s ambition to deliver growth in every postcode”. Senior banking executives have told the BBC they expect the sector to be “on the menu” at the budget....
The agenda 10am BST: Eurozone trade and inflation data 1.30pm BST: NY Fed Services Activity Index Key events 9m ago CBI: Chancellor should avoid 'further sector-specific taxation' 9m ago Introduction: John Healey poised to raise taxes on banks in budget CBI: Chancellor should avoid 'further sector-specific taxation' The Confederation of British Industry has suggested John Healey should avoid “further sector-specific taxation”, such as a bank tax. Louise Hellem , chief economist at the CBI , said: double quotation mark “The financial services sector is vital to driving investment, innovation and business growth across the economy. Government has set the right direction through its Financial Services Growth and Competitiveness Strategy and the Leeds Reforms – the priority now is delivery.
“The autumn Budget should set the agenda for a competitive and predictable environment that turns those reforms into tangible progress, unlocking domestic investment, deepening UK capital markets and helping more firms to scale and grow. “It should also avoid measures that would undermine competitiveness or weaken incentives to invest. With the business tax contribution already at a record share of receipts, that means avoiding further sector-specific taxation, including on a banking sector already facing a higher tax rate than competing international financial centres.” Introduction: John Healey poised to raise taxes on banks in budget Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.
Britain’s banks may be ‘part of the jewel’ in the UK economic crown, as chancellor John Healey put it yesterday , but that won’t protect them from being hit in this month’s budget. John Healey is poised to tax Britain’s banks in his 28 October budget, the Guardian understands, as the chancellor looks to fix the damage inflicted on the public finances by war in the Middle East. As my colleagues Heather Stewart, Jessica Elgot and Kalyeena Makortoff reported last night , Healey has decided to tap the financial sector for additional revenue.
One option understood to be under discussion – reversing cuts to the bank surcharge made by Jeremy Hunt – would raise upwards of £2bn a year. Industry figures believe that will probably mean raising the surcharge back to 8%, from 3% at present, to help bolster the government’s fiscal headroom (which has been eroded by the jump in borrowing costs this year). News of the looming tax raid came hours after Healey praised the banks as crucial to supporting economic growth, telling reporters: double quotation mark “People too often see them as big, distant financial institutions, when they are hardwired into the economic fabric of this country and our future prospects.” Banks sound resigned to being shorn at the budget, but they’re not happy about it.
Banking sector trade body, UK Finance , warned that “further increases in bank taxes would weaken competitiveness, discourage investment and job creation, and work against the government’s ambition to deliver growth in every postcode”. Senior banking executives have told the BBC they expect the sector to be “on the menu” at the budget.... The agenda 10am BST: Eurozone trade and inflation data 1.30pm BST: NY Fed Services Activity Index
Source: The Guardian
