The Chief Executive of Barclays has urged the UK Government to limit pay rises for Public Sector workers and resist further taxation on banks, warning that additional fiscal pressure could undermine growth in the financial sector.
CS Venkatakrishnan highlighted the need for the Government to curb its own spending as Chancellor Rachel Reeves prepares to announce her Budget in November. He stressed that controlling wage inflation across the economy, particularly in the Public Sector, is crucial to managing broader economic pressures.
Despite recent slowing in UK wage growth, Public Sector pay continues to rise at an annual rate of 5.7% excluding bonuses, compared with 4.8% in the Private Sector. Venkatakrishnan argued that unchecked pay rises could exacerbate inflation and strain public finances.
The Barclays chief also warned against further taxation on the banking industry, noting that UK banks are already subject to higher taxes than their international peers. Last year, Barclays reported £5.7bn in pre-tax profits in the UK and paid almost £1.4bn in total tax, including £198m in corporation tax and £154m for the bank levy.
Venkatakrishnan indicated that the total effective tax rate for UK banks stood at approximately 46%, significantly higher than rates in New York (28%) and the EU (29–39%). He stressed that targeting banks for additional taxes could deter growth and weaken London’s position as a global financial centre.
Investor concerns over potential windfall taxes on banks led to a £6bn drop in the combined market value of major UK lenders last month, intensifying pressure on the Government to carefully consider fiscal measures.
Other banking leaders, including Lloyds Banking Group CEO Charlie Nunn, have supported the call to avoid additional tax burdens, emphasising the sector’s role in supporting households and businesses while driving economic growth.
Venkatakrishnan’s comments follow his previous statements during Barclays’ second-quarter results, where he reiterated that growth, not higher taxation, should remain the UK’s economic priority. He also raised concerns about proposals to amend ringfencing rules, which require UK banks to separate retail operations from higher-risk investment banking.
As the UK Government prepares its Budget, the message from banking executives is clear: limiting Public Sector pay increases and avoiding further taxes on banks are vital to sustaining economic growth, investor confidence, and the stability of the financial sector.
