Budget tax raid on banks would be an 'own goal' for the UK economy, CBI warns Healey

The Confederation of British Industry is warning John Healey that an expected bank tax raid will be an ‘own goal’ for the economy.

In a last-ditch plea to the Chancellor before the Budget, the CBI’s chief Rain Newton-Smith will today argue that the move would hurt Britain’s competitiveness.

Healey is widely expected to increase the surcharge that banks pay on corporation tax, which stands at 3 per cent.

Backers of the move say the lenders can afford to pay more as their profits are boosted by rising interest rates – and the Government seeks money to fund cost-of-living support measures. 

But the industry says it already pays much higher taxes than firms in other financial hubs such as Frankfurt and New York.

Newton-Smith said that while Britain’s financial services sector is centred in London, it also supports more than 650,000 jobs outside the capital and contributes more than £200billion to the economy every year.

‘We want our strongest sectors to keep getting stronger – because that is where growth comes from,’ she added.

‘Our financial sector already faces a higher tax burden than other global centres. Adding to that would be an own goal for our competitiveness. 

'The Budget next week must be about giving business breathing space and backing wealth creation.’