IMF suggests UK should cut spending rather than raise taxes on banks, as Healey prepares budget raid – as it happened

Heather Stewart is the Guardian’s economics editor, reporting from Bangkok this week:

We’ve just been in the IMF’s Europe press conference, where the topic of bank taxes in the UK came up [following our report that the chancellor is poised to tax Britain’s banks].

Asked about the possibility at John Healey’s upcoming budget, Helge Berger , the economist who is deputy director in the IMF’s European department, suggested there might be better places to look to balance the books.

Berger pointed out that Healey’s predecessor, Rachel Reeves , had raised taxes in her budgets, saying:

double quotation mark “The last two budgets involved increasing government revenue, and ultimately there’s a moment where this becomes less productive but there’s still areas where Britain can make additional headroom available: modernising the property taxes or VAT, these are good examples. We wouldn’t recommend labour tax.”

double quotation mark “Ultimately, with taxes roughly at 40% of GDP - historically, for Britain, a high number - then of course balancing these measures on the fiscal side, doing a bit more there, makes good sense.”

He pointed to cost-cutting measures including removing the pensions triple lock , and “better targeting social benefits,” adding, “so I think that’s where you would put the emphasis, rather than the tax that you mentioned.”