IMF tells Britain to look at pensions and welfare, not banks, before the budget
The story
The International Monetary Fund has stepped into the debate over Britain's budget, telling Chancellor John Healey he should look for savings in pensions and welfare instead of putting new taxes on the country's banks.
The advice came from Helge Berger, deputy director of the IMF's European department. He was asked about bank taxes after it was reported that Healey plans to raise extra money from the sector. The budget is due later this month.
Healey is said to be ready to tax the banks more as part of the package. People who back the plan argue that banks were bailed out by taxpayers during the financial crisis and can afford to pay more now. They also point to the strong profits banks have made as interest rates rose.
The IMF's comments add weight to the other side of the argument. Rather than turning to the banks, the fund is pointing the government toward the money it spends on pensions and benefits.
The final call rests with Healey and the Treasury. When the budget arrives, it will show whether the government sticks with its plan for the banks or takes the IMF's advice and looks at spending instead.
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