Rick Haythornthwaite urges bold reform as Chancellor rules out VAT rise in Autumn Budget
The chair of NatWest has called on Chancellor Rachel Reeves to launch a sweeping programme of tax reform in her first Autumn Budget, arguing that Britain needs a bold, long-term plan to revive growth and restore market confidence.
Rick Haythornthwaite, writing in the Financial Times, pressed for a ten-year strategy to reset the UK’s system of incentives. He warned against limited, short-term fixes that “push economic leftovers around the plate,” and said decisive action was needed to unlock domestic capital, encourage investment and deliver progress on housing and net zero.
“The November Budget could mark a turning point,” he argued. “This is the moment for radical action rather than incremental tinkering.”
Pressure on Banks
His intervention comes as speculation mounts over new levies on Britain’s financial sector. Earlier this year banks lost £8bn in market value after think tanks floated the idea of a fresh tax on lenders. NatWest’s shares alone fell five per cent in a single trading session.
Bank executives have warned that further taxation would undermine their ability to support households and businesses, including mortgage borrowers still feeling the strain of higher interest rates. HSBC’s Georges Elhedery said new charges risked eroding the industry’s capacity to invest and deliver growth.
Reeves Rules Out VAT Rise
While Reeves has indicated that some tax increases are inevitable, she has made clear that VAT will not be touched in November’s Budget. Raising VAT, she told broadcasters, would hit working families directly and risk fuelling inflation.
She has, however, left the door open to other tax rises, noting that global conflicts, higher borrowing costs and new trade barriers have reshaped the fiscal landscape since Labour’s manifesto was published.
Mortgage Industry Implications
For mortgage brokers and lenders, the stakes are high. A radical overhaul of the tax system could, on one hand, stimulate investment in housing and infrastructure. On the other, any fresh levy on banks risks limiting their lending capacity, tightening credit conditions for prospective buyers and those refinancing.
As Reeves prepares to present her Budget, the balance she strikes between fiscal caution and structural reform will be closely scrutinised by the mortgage industry.
Think tank urges Reeves to raise property taxes
Haythornthwaite’s call for reform comes as policy groups argue the Chancellor should target property to plug the fiscal gap. Read more here...
