Target pensions or welfare, not banks, IMF tells John Healey
Summary
The International Monetary Fund (IMF) advised UK politician John Healey to focus on cutting pensions and welfare benefits instead of increasing taxes on banks. The IMF highlighted that the UK already has high overall taxes and suggested reforms in property taxes or VAT if more money is needed.Key Facts
- The IMF suggested targeting pension and welfare spending cuts rather than raising bank taxes.
- The UK’s tax level is about 40% of its economic output, which the IMF says is high for Britain.
- The IMF proposed reforming property taxes or VAT as alternative ways to raise revenue.
- John Healey plans to raise more money from British banks through new taxes.
- UK Finance, a banking lobby group, warned higher bank taxes could reduce lending and harm the economy.
- Research from UK Finance predicts a higher bank tax could lower UK GDP by £1.2 billion by 2029-30.
- The UK’s biggest banks made £29.2 billion in profits in the first half of 2024 and returned nearly half to investors.
- Some experts say banks can afford a moderate tax rise to contribute more financially without hurting their business.
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