Target pensions or welfare, not banks, IMF tells John Healey
News Source
β’Fri, 16 Oct 2026 15:33:29 GMT
π° What Happened
The International Monetary Fund has urged UK chancellor John Healey to save money on pensions and welfare instead of taxing banks. IMF official Helge Berger said UK taxes are already high at about 40% of GDP, so cuts are a better place to look. Supporters of a bank tax argue that banks were rescued by taxpayers in the 2008 financial crisis and can afford to pay more now.
π The Backstory
UK Finance, which speaks for banks, wrote to Healey warning that reversing cuts to the bank surcharge would lower GDP by 1.2 billion pounds by 2029-30 and cut lending by 10.4 billion pounds. But union analysis says the Treasury has already lost 6 billion pounds since the surcharge was cut in 2023. The UK's four biggest banks made 29.2 billion pounds of profit in the first half of the year. Former banker Philip Augar said a moderate tax rise could raise 2 to 3 billion pounds a year.
π― Why It Matters
This choice affects both bank profits and public services. It also tests whether banks pay more after several years of very strong earnings.
The International Monetary Fund has urged UK chancellor John Healey to save money on pensions and welfare instead of taxing banks. IMF official Helge Berger said UK taxes are already high at about 40% of GDP, so cuts are a better place to look. Supporters of a bank tax argue that banks were rescued by taxpayers in the 2008 financial crisis and can afford to pay more now.
UK Finance, which speaks for banks, wrote to Healey warning that reversing cuts to the bank surcharge would lower GDP by 1.2 billion pounds by 2029-30 and cut lending by 10.4 billion pounds. But union analysis says the Treasury has already lost 6 billion pounds since the surcharge was cut in 2023. The UK's four biggest banks made 29.2 billion pounds of profit in the first half of the year. Former banker Philip Augar said a moderate tax rise could raise 2 to 3 billion pounds a year.
This choice affects both bank profits and public services. It also tests whether banks pay more after several years of very strong earnings.