From Dailymail · · 1m 40s
Chancellor should cut benefits instead of taxing banks
IMF urges UK to slash welfare spending over bank tax plans.
In brief
IMF urges UK to slash welfare spending over bank tax plans. UK's IMF official says cutting benefits, not taxing banks, would fix budget shortfalls. Originally reported by Dailymail.
Quick answers
- What next?
- Chancellor must decide between cutting welfare spending or raising bank taxes to fix budget shortfalls.
- What is the key takeaway from Chancellor should cut benefits instead of taxing banks?
- UK's IMF official says cutting benefits, not taxing banks, would fix budget shortfalls.
IMF warns on UK tax plans
International Monetary Fund says UK should cut benefits instead of taxing banks to fix budget shortfalls.
“Britain should cut the ballooning benefits bill rather than hit banks with higher taxes”
Chancellor faces backlash
Chancellor John Healey faces criticism for planning bank taxes while calling banks 'the jewel in the crown of the british economy'.
“John Healey is speaking out of both sides of his mouth”
Bank tax hike details
Healey plans to raise bank surcharge from 3 per cent to 8 per cent, potentially earning £2billion annually.
“The chancellor looks set to hike the surcharge banks pay on top of standard corporation tax from 3 per cent to as high as 8 per cent”
Economic impact warnings
Industry warns bank tax hike could cost economy £20billion over next decade by reducing lending and investment.
“But industry chiefs warned the move would push up interest rates on mortgages and corporate loans and reduce lending and investment”
IMF official's advice
IMF economist Helge Berger says cutting welfare spending and better-targeting benefits would make budget numbers add up.
“removing the triple lock on pensions and better targeting social benefits were among the options”
Bank shares drop
Lloyds and NatWest shares fell 2.7 per cent and 2.4 per cent as investors worried about bank tax plans.
“Shares in britain's biggest banks fell yesterday, with lloyds down as much as 2.7 per cent and natwest 2.4 per cent”
TUC demands bank taxes
TUC says banks make £1billion weekly while bonuses hit post-crash records and should pay fair share.
“Britain's big four banks are making a billion pounds a week, while bonuses have hit a post-crash record”
Bank tax history
Bank tax surcharge was cut to 3 per cent under Rishi Sunak when corporation tax rose from 19 per cent to 25 per cent.
“The bank surcharge - and supplementary 8 per cent levy on profits in addition to corporation tax - was introduced a decade ago”
UK Finance warns
UK Finance says bank tax hike would reduce lending by £17.5billion over next decade and hurt UK competitiveness.
“In a letter to the chancellor this week, uk finance chief david postings said higher taxes on banks would reduce lending to households and businesses by £17.5billion over the next decade”
International tax comparison
UK banks face 46.5 per cent tax rate compared with 39.1 per cent in Frankfurt and 27.9 per cent in New York.
“UK banks are currently taxed at a rate of 46.5 per cent once employment levies and vat are taken into account”
What next?
Chancellor must decide between cutting welfare spending or raising bank taxes to fix budget shortfalls.
“The economic costs of raising the surcharge would accumulate over time”
The key point
UK's IMF official says cutting benefits, not taxing banks, would fix budget shortfalls.
