Bank lobby chief warns Reeves over budget tax raid

The caput of Britain's main banking lobby radical has warned the chancellor against a fund raid connected the industry, arguing that it would undermine her purpose of delivering sustainable economical growth.

In a missive to Rachel Reeves seen by Sky News, David Postings, the main enforcement of UK Finance, said renewed speculation astir increases to banks' taxation load risked undermining their planetary competitiveness.

Mr Postings' missive was sent earlier this week, conscionable days aft shares successful the largest UK banks - including Barclays, Lloyds Banking Group and NatWest Group - slid amid fears of a renewed taxation raid connected the sector.

"Both the fiscal services assemblage and the wider capitalist assemblage have...strongly welcomed your wide accent - astir precocious done the Leeds Reforms - connected ensuring that the UK's fiscal services assemblage has the close situation to beryllium internationally competitive," helium told the chancellor.

"As you said successful launching those reforms, it is captious to present certainty for banks operating present and guarantee that UK banks tin vie internationally and thrust economical growth.

A study published past week by the Institute for Public Policy Research (IPPR) think-tank projected that the chancellor usage her November fund to enforce an further levy connected slope profits - prompting an capitalist sell-off of shares successful the main UK lenders.

Treasury insiders person sought to play down the prospects of specified a determination during backstage discussions with slope executives successful caller days, but the timing of Mr Postings' missive underlines the heightened anxiousness successful the assemblage pursuing the crisp betterment successful its profitability successful caller years.

"As galore of our members person precocious noted, efforts to boost the UK system and foster a beardown fiscal services assemblage would not beryllium accordant with further taxation rises connected the sector, which already makes a important publication to the nationalist finances," Mr Postings wrote.

"The accent should beryllium connected continuing to instrumentality an docket of regulatory betterment that allows for an due accommodation successful hazard appetite."

Mr Postings denied that the betterment successful slope profitability was unreasonable, saying: "UK banks' nett involvement margins person lone returned to historically much mean levels and are acold from excessive."

He added that the manufacture had made a grounds taxation publication of astir £45bn past year.

"UK Finance investigation shows that the UK's full taxation complaint for exemplary firm and concern banks is already notably higher than different large fiscal centres specified arsenic Amsterdam, Frankfurt, Dublin, and New York," Mr Postings told Ms Reeves.

"This disparity is driven by the permanence of sector-specific taxes successful the UK, dissimilar successful different EU jurisdictions wherever comparable arrangements person been phased out."

He added that a further taxation connected the banking manufacture "would tally antagonistic to the government's purpose of supporting the fiscal services assemblage and marque the UK little competitory internationally, perchance driving superior and concern to different jurisdictions".

"It would besides hazard undermining the sector's quality to thrust growth, innovation, and productivity crossed the UK economy.

"A pro-growth, unchangeable operating situation is the champion mode to present beardown and sustainable taxation revenues, clasp endowment and underpin concern crossed the economy."

UK Finance declined to remark further connected the missive erstwhile contacted by Sky News.