Barclays boss warns Reeves against further tax rises
CS Venkatakrishnan warned the Chancellor on Tuesday that imposing more taxes on Britain's banks as well as key growth sectors such as pharmaceuticals and biotech could sabotage her efforts to boost the country's economy.
Fears of a fresh bank tax have grown in recent months after a leaked memo this year from Angela Rayner, the Deputy Prime Minister, urged Ms Reeves to raise the rate of corporation tax paid by Britain's largest lender.
But Mr Venkatakrishnan said squeezing the banks for more tax would backfire and damage the economy.
'If growth is the primary objective for the UK ... higher taxation of businesses is not a path towards that growth. Banks are among the bigger taxpayers in the country,' he said.
'Growth has been an important objective of the UK economy and we want good quality growth, which is fuelled by the important sectors of the economy.
'Banks are one of them and not the only one. There are many other important sectors – biotech, pharma, technology itself – and we want all of these sectors to prosper. And in our prosperity and in our growth lies the growth of the country.'
Unsustainable public spending plans
Mr Venkatakrishnan's comments follow warnings from Charlie Nunn, Lloyds Bank's chief executive, that Ms Reeves's growth ambitions 'wouldn't be consistent with tax rises'.
The Office for Budget Responsibility's recent warning that the UK public spending plans are 'unsustainable' has fuelled speculation that Ms Reeves might announce new taxes on banks in her autumn Budget.
Lenders already face several taxes, including standard corporation tax as well as the bank surcharge and the bank levy. According to UK Finance, the bank lobby group, lenders paid £10.8bn in corporation tax last year, and the average tax rate is the highest in the world.
Mr Venkatakrishnan was speaking alongside half year results from Barclays, which showed 28pc rise in pre-tax profits to £2.5bn in the second quarter of 2025 as its trading business capitalised on volatility caused by Donald Trump's tariffs.
Barclays announced the launch of a new £1bn share buyback scheme, in addition to a 3p per share dividend worth £400m.
The shareholder payouts in the first half of 2025 were 21pc higher compared to the same period in 2024, when Barclays launched a £750m share buyback initiative and a 2.9p per share dividend.
Barclays was also boosted by the £600m takeover of Tesco Bank it completed in October 2024, which helped it make £350m of cost cuts in the first half of 2025.
Mr Venkatakrishnan added that Barclays' three-year transformation plan remains 'on track' to deliver 'structurally higher and more stable returns.'
Barclays' transformation is set to see the bank cut costs by £2bn, including slashing thousands of jobs throughout the bank.
The lender, which is the UK's second biggest bank, aims to return £10bn to shareholders across the three-year period.
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