UK Business Group Warns Bank Tax Hike Would Be "Own Goal" Ahead of Budget

The Confederation of British Industry will warn Chancellor John Healey on Wednesday that raising taxes on banks in next week's Budget would be an "own goal" for Britain's economy and competitiveness. CBI chief executive Rain Newton-Smith will say in a London speech that the financial sector already faces a higher tax burden than other global centres, and that piling on more would penalize a thriving industry. The warning comes as Healey is poised to raise the bank surcharge on corporation tax from 3% to 8%. Banks have cautioned the move could restrict lending, drive up mortgage costs and lower savings rates. The plea follows pressure from Labour's Left and trade unions to target lenders after higher interest rates boosted profits. TUC economics head Geoff Tily told the Treasury committee the big four banks made £29bn in the first half of the year and should pay more.