Natwest chair: Rachel Reeves’ Budget must include radical tax reform
The chair of banking giant Natwest has called for Rachel Reeves to implement “radical tax reform” in her Autumn Budget.
Rick Haythornthwaite has said a “bold long-term plan” to “kick-start growth” would reassure jittery bond markets and “deliver much-needed social benefits”.
“This is the time for a 10-year programme of radical tax reform. Time for the Chancellor to aim high with a fundamental reset of the UK economic incentive system,” he said.
Reeves is facing a batch of conflicting calls from across the political aisle with Labour rebels demanding a wealth tax whilst businesses call for the Treasury to reduce the burden inflicted upon them.
Haythornthwaite said “simplifying levers that can be pulled to restore tax progression” would help support investment, unlock domestic capital and meet party goals on housing and net zero.
“The November Budget could mark a turning point; where the UK starts facing up to its biggest, most persistent problems, with radical action, rather than following the well-trodden course of pushing economic leftovers around the plate.
“For the Chancellor, this will take boldness and ambition,” the bank chair wrote in a letter published in the Financial Times.
Reeves is widely expected to be staring down a £20bn black hole come the Budget after u-turns on welfare reform, a hefty Spending Review and downgrades to growth forecasts.
The Chancellor has pledged to not “raise taxes on working people,” pledging to hold income tax, national insurance and VAT, which has led to economists looking across “stealth and sin taxes” to plug the gaps.
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Natwest tumbled on bank tax speculation
However, Britain’s top lenders have not been able to escape tax speculation.
Earlier this year, UK banks lost £8bn after left-wing think tax Institute for Public Policy and Research (IPPR) published a report calling for a fresh levy.
Natwest shares tumbled five per cent – shedding £2.5bn in market value.
The Liberal Democrats piled on pressure for a banks tax earlier this month with Treasury spokeswoman calling for an annual £7bn cash grab.
But such a move would face fierce backlash from the City with the bosses of banking giants warning a tax would dent the government’s mission for economic growth.
HSBC chief Georges Elhedery said: “Additional taxation on banks runs the risk of eroding our continued investment capacity in the business and in supporting our customers, and ultimately in delivering growth for the UK.”