Bank battle: history suggests Burnham faces fight if he opts for windfall tax
As lenders’ profits soar, calls grow for a levy to help new PM ease cost of living pressures on households It has been a stellar week for UK banks. Fuelled by high interest rates and market turbulence rippling out from the US war on Iran, major lenders have revealed soaring half-year profits that allowed bosses to boost bonus pots and give billions of pounds to shareholders. Collectively, the…
The UK's four largest banks – HSBC, NatWest, Barclays and Lloyds – reported a combined £29.2bn in profits over the first half of 2023, with almost half (£13.7bn) earmarked for shareholders through dividends and share buybacks. This surge in bank earnings has ignited calls for a windfall tax to help ease the cost of living crisis, which Prime Minister Andy Burnham has been urged to address.
Campaigners and trade groups say a windfall tax on bank profits could yield £19bn from the big four banks alone, potentially aiding Burnham's ambitious plans to reduce living costs and reform the UK's social care system. However, banks are not backing down easily, with executives warning that higher taxes could stifle lending and harm the economy.
Some, like JP Morgan's Jamie Dimon, have even suggested that excessive taxation could prompt them to reconsider investments in the UK. Despite the banks' resistance, Burnham has not explicitly ruled out a bank tax, acknowledging the need to support households grappling with rising costs.
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