Barclays chief urges Government to limit wage rises and avoid hiking bank taxes

The boss of Barclays has said the UK Government should limit pay rises for public sector workers and renewed calls to avoid hiking taxes for banks in the upcoming Budget.

CS Venkatakrishnan, chief executive of the banking group, told the Financial Times that wage inflation was a problem across the UK economy.

“We need to find a way to curb wage inflation,” he told the newspaper, saying that expenditure needs to be restrained “at the government level” particularly in relation to rising wages for public sector workers.

Wage inflation has been a concern for economists and policymakers as it can contribute to overall prices across the country remaining elevated.

However, employers have been under pressure to raise pay for their staff who face a squeeze from the higher cost of living.

Overall wage growth has slowed in recent months, remaining at an average rate of 5% in the three months to June.

But this rises to 5.7% for the public sector, above the 4.8% annual rate within the private sector.

This week, thousands of members of the Rail, Maritime and Transport (RMT) union went on strike, shutting down large parts of the London Underground, after rejecting a 3.4% pay offer.

Meanwhile, Mr Venkatakrishnan told the Financial Times that he hoped there was an “extremely low probability” of Chancellor Rachel Reeves raising taxes on banks at the upcoming autumn Budget.

Last month, influential think tank the Institute for Public Policy Research (IPPR) said Ms Reeves could raise billions of points for the public purse by imposing a windfall tax on lenders.

Hiking a levy on the profits of British banking giants could raise up to £8 billion a year for public services, the IPPR said.

Several high street chiefs have warned that increasing costs for the financial services sector would go against the Government’s pro-growth mission.

“London is a great global financial centre and the path to growth does not lie to taxing the sector even more,” Mr Venkatakrishnan said.

“I have had the view from day one that this is a Government that is pro business and particularly pro the financial industry.”

Ms Reeves is due to deliver her autumn Budget on November 26, where she is widely expected to have to hike taxes to balance the books.

But she is hamstrung by an election vow not to increase income tax, national insurance and VAT – meaning she is likely to have to turn to the corporate sector to raise revenues.

Paul Nowak, general secretary of the Trades Union Congress (TUC), described Mr Venkatakrishnan’s remarks as “tone deaf”, adding that it was “insulting for him to call on nurses, teachers and paramedics to tighten their belts when he’s just pocketed a bumper pay rise”.

The Barclays chief was paid £10.5 million last year, more than double the previous year, due to him cashing in long-term bonuses which were boosted by the bank’s share price rising.

“Public services aren’t a luxury – they’re the backbone of a functioning economy,” Mr Nowak said.

“And they are only as strong as the staff who work in them.”