The International Monetary Fund has urged Britain's chancellor John Healey to cut pensions and welfare rather than raise taxes on banks in the upcoming budget, according to Helge Berger, deputy director of the IMF's European department.
The IMF's guidance comes after the Guardian reported that Healey plans to increase taxes on the banking sector as part of efforts to raise additional revenue. Berger was asked about the bank tax proposal but advocated instead for savings targeting pensions and welfare programmes.
Supporters of the planned bank tax counter that financial institutions received taxpayer bailouts during the 2008 financial crisis and can afford to contribute more to the public finances now. The source material does not provide the IMF's stated reasoning for preferring cuts to pensions and welfare over a bank tax, nor does it detail the scale of either option Berger discussed.
Healey's budget is scheduled for later this month. The tension between the IMF's recommendation and the case made by tax supporters reflects a broader debate over how Britain should manage its fiscal challenges and who should bear the burden of raising government revenue.