Sir Keir Starmer and Rachel Reeves have been urged not to rise taxes on banks (Image: Getty)
The head of one of Britain’s banks has issued a warning to Sir Keir Starmer and Labour ahead of the upcoming Autumn Budget. Barclays chief executive CS Venkatakrishnan renewed calls to avoid rising taxes for banks and urged the Government to limit pay increases for public sector workers.
Chancellor Rachel Reeves is set to deliver the Budget on November 26 where she is widely expected to have to hike taxes to balance the books. Mr Venkatakrishnan said wage inflation was a problem across the UK economy. He added: “We need to find a way to curb wage inflation.”
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Barclays chief executive CS Venkatakrishnan (Image: Getty)
The bank boss told the Financial Times that expenditure needs to be restrained “at the Government level” particularly in relation to rising wages for public sector workers.
Wage inflation has been a concern for economists and policymakers as it can contribute to overall prices across the country remaining elevated.
？However, employers have been under pressure to raise pay for their staff who face a squeeze from the higher cost of living.
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The Barclays chief executive warned against raising taxes on banks (Image: Getty)
Overall wage growth has slowed in recent months, remaining at an average rate of 5% in the three months to June.
But this rises to 5.7% for the public sector, above the 4.8% annual rate within the private sector.
This week, thousands of members of the Rail, Maritime and Transport (RMT) union went on strike, shutting down large parts of the London Underground, after rejecting a 3.4% pay offer.
Meanwhile, Mr Venkatakrishnan told the FT he hoped there was an “extremely low probability” of Ms Reeves raising taxes on banks at the next Budget.
Warning against this, he said: “UK banks are taxed more than banks anywhere else, how much more are you going to squeeze this?”
Last month, influential think tank the Institute for Public Policy Research (IPPR) said Ms Reeves could raise billions of points for the public purse by imposing a windfall tax on lenders.
Hiking a levy on the profits of British banking giants could raise up to ￡8 billion a year for public services, the IPPR said.
Several high street chiefs have warned that increasing costs for the financial services sector would go against the Government’s pro-growth mission.
“London is a great global financial centre and the path to growth does not lie to taxing the sector even more,” Mr Venkatakrishnan said.
“I have had the view from day one that this is a Government that is pro business and particularly pro the financial industry.”
The Chancellor has rejected forecasts from the National Institute of Economic and Social Research, an independent think tank, that she would need to plug a ￡51 billion black hole in the public finances.
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Reports suggest the Labour frontbencher is weighing up tax hikes on property and banks after Government u-turns on winter fuel payments and planned welfare cuts put a dent in her fiscal plans.
The Chancellor is hamstrung by an election vow not to increase income tax, national insurance and VAT — meaning she is likely to have to turn to the corporate sector to raise revenues.
It comes as new figures published by the Office for National Statistics on Friday showed the UK economy flatlined last month.
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