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IMF rebukes Healey over bank tax plan and tells him to cut welfare and pensions instead

IMF rebukes Healey over bank tax plan and tells him to cut welfare and pensions instead

The IMF has publicly warned Chancellor John Healey to scrap plans to raise taxes on banks ahead of his October 28 Budget, telling him to cut welfare spending and reform pensions instead. IMF deputy director Helge Berger said UK tax revenues at roughly 40% of GDP were already "historically high" and that further hikes on banks would be "less productive". Industry chiefs warned the planned bank surcharge hike — from 3% to as high as 8% — could cost the economy £20 billion over the next decade.

Berger specifically named scrapping the triple lock and 'better targeting social benefits' as where Healey should focus cuts.

Bank chiefs warned higher taxes would push up mortgage rates, throttle lending and drive international lenders to shift jobs out of London.

Healey faced accusations of 'speaking out of both sides of his mouth' after praising banks as 'the jewel in the crown of the British economy'.

MoreThe IndependentCut public spending rather than raising taxes on banks, IMF warns HealeyDaily MailCut benefits instead of taxing banks, IMF tells HealeyLBCIMF warns John Healey to consider spending cuts rather than raising bank taxesThe GuardianTarget pensions or welfare, not banks, IMF tells John HealeyThe TelegraphIMF: Healey should cut welfare spending instead of taxing banks
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