Barclays boss: UK banks are taxed too much
Ahead of the Autumn Budget, Barclays’ chief executive has called on the government to curb pay rises for public sector workers and to avoid increasing taxes on banks.
Speaking to the Financial Times, CS Venkatakrishnan said “we need to find a way to curb wage inflation,” and emphasised the need to curb expenditure at the government level, especially public sector wages.
Last month, the Office for National Statistics reported that public sector pay growth outpaced private sector growth.
Venkatakrishnan directed his frustrations at raising taxes on British banks, telling the FT that “UK banks are taxed more than banks anywhere else, how much more are you going to squeeze this?”
He explained that UK banks are, in effect, taxed at a rate of approximately 46 per cent in 2024, compared with 28 per cent for banks in New York, while lenders in the EU are taxed at rates ranging from 29 to 39 per cent.
He stated: “London is a great global financial centre and the path to growth does not lie to taxing the sector even more.”
In July, the FTSE 100 bank announced its first-half results, which showed a 28 per cent increase in profit before tax, reaching £5.2bn. Its group income topped £7.2bn, a 14 per cent hike, as net interest income soared 12 per cent to £3.1bn despite falling UK interest rates.
Barclays boss urges growth focus
Venkatakrishnan has been supportive of the UK’s Labour government, even as others have questioned its growth agenda.
He said: “I have had the view from day one that this is a government that is pro-business and particularly pro the financial industry.”
Back in April, he defended the ring-fencing regulation facing British banks, despite his FTSE 100 peers calling on the Chancellor to abolish it.
He is critical of her proposal to reform the rules, arguing that they provide crucial depositor protection and that the benefits outweigh the costs.
However, on the upcoming Budget in November, he said he hopes and expects the Chancellor will use this time to carefully consider the difficult choices ahead.
“No Budget keeps everyone happy, but the object of it is to foster growth in the country,” he added.