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IMF tells Healey to cut welfare and scrap triple lock rather than hit banks with new tax

IMF tells Healey to cut welfare and scrap triple lock rather than hit banks with new tax

The IMF has publicly rebuked Chancellor John Healey over his plans to raise the bank surcharge from 3% to as high as 8% at the October 28 Budget, warning that Britain's tax burden is already at a historically high 40% of GDP. IMF deputy director Helge Berger, speaking in Bangkok, said the emphasis should fall on spending cuts — specifically axing the triple lock and tightening welfare — rather than squeezing banks further. Industry chiefs have warned the planned tax could cost the economy £20bn over the next decade and force international banks to shift operations out of London.

Banks warned Healey the surcharge hike would push up mortgage rates, cut lending, and could drive lenders to move jobs abroad.

Berger said reforming property taxes or broadening VAT would be more productive than a bank levy if extra revenue were needed.

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

MoreDaily MailCut benefits instead of taxing banks, IMF tells HealeyThe IndependentCut public spending rather than raising taxes on banks, IMF warns 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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