Reeves demands bank chiefs back Budget
Top bank chiefs are expected to praise Rachel Reeves’ Budget measures, according to reports, as the Chancellor looks set to dismiss calls for extra taxes on the sector.
Lenders are being encouraged to back the government and follow through with extra investment plans to support Britons up and down the country, a report in the Financial Times said.
One source told the newspaper that banks would make fewer criticisms of the government in return for being spared from extra levies.
Another figure said: “There was a frustration that the government’s positive messaging about the economy was being undermined by unwelcome commentary.”
There have been numerous calls from think tanks, MPs and lobby groups for Reeves to bring the bank surcharge back up to 8 per cent from its current 3 per cent level and raise at least £2bn.
Some economists have argued that the Treasury should look to recover losses from the Bank of England’s bond-selling programme after commercial banks made extra profits.
Government officials insisted that there was no “deal” struck between City giants and the government.
Bank chiefs ‘in group chat’ with Reeves
Individuals acting on behalf of banks’ interests have argued that lending would fall if the Treasury slapped extra taxes on the sector.
Reeves has reportedly struck a close relationship with bank chiefs after one year in Downing Street, with one report in The Sunday Times suggesting she shared a group chat with some executives.
Earlier this year, City chiefs praised her deregulatory drive in her Leeds Reforms that eased rules on mortgages. The Financial Conduct Authority (FCA) has also trickled out a series of announcements to cut red tape as part of its new mandate to focus on growth.
Other mooted policies which had been considered by the Treasury only for them to be thrown out by the Chancellor included an exit tax on individuals leaving the UK and higher taxes on law firms and other limited partnerships.
Adding to her efforts to rebuild relationships with businesses after they were targeted with higher taxes in last year’s Budget, the Chancellor has also now looked to galvanise her backbenchers amid some criticism that the Budget will dampen growth prospects.
In a mini rally on Monday, she told MPs she would stay in the job and look to defy her critics.
She also said leaks had been “incredibly destabilising” despite mounting suspicions from commentators that briefings came from her own team.
She also said there would be “brilliant stuff” in the Budget and urged Labour MPs to unite behind the “package” of measures.