Government Won't Rule Out a Bank Tax Rise
The government has declined to rule out raising taxes on banks at its first Budget in the autumn, keeping the option on the table as the Chancellor hunts for revenue. Ministers would not be drawn on the levy that banks pay on top of corporation tax, fuelling speculation ahead of the statement in late October. No decision has been announced.
Banks, which have enjoyed fat profits as interest rates rose, are a tempting target for a Chancellor facing hard choices and reluctant to raise taxes on ordinary households. Squeezing the sector, though, risks accusations of deterring investment in the City at a time when the government is courting growth. The refusal to rule it out is a familiar pre-Budget dance, keeping options open while sending a signal to the industry. With costly promises to fund, John Healey has little room to spare. Watch whether a bank-tax rise features when the Budget lands.