Asked on bank tax, UK's Healey stresses sector's broader contribution

By David Milliken

BANGKOK, Oct 15 (Reuters) - British finance minister John Healey said banks were central to the country's economic future on Thursday, when pressed by reporters about the likelihood of imposing a windfall tax on their bumper profits.

Healey is due to set out his first budget on October 28 and increasing the 'bank levy' charged on top of standard corporation tax could raise billions of pounds at a time when many lenders have profited from rising interest rates.

However, British banks argue they are already highly taxed compared with some other major economies and some analysts fear that higher bank taxes would see them put up charges.

"My observation on the banks is that people too often see them as big, distant financial institutions, when they are hardwired into the economic fabric of this country and our future prospects," Healey told reporters in Bangkok, where he is attending the International Monetary Fund's annual meeting.

"That said, I've got decisions to take in the budget and I will," he added, having previously said his comments were not intended to be a steer on any intended tax changes.

In a separate interview with Bloomberg Television, Healey described banks as "a part of the jewel, if you like, in the British economic crown".

When asked if higher taxes on banks could be offset by lower capital requirements, he said he would not be drawn into speculation about the budget.

(Additional reporting by Sarah Young; editing by William James and Paul Sandle)