Healey Reported to Be Weighing Bank and Oil Windfall Taxes
The Chancellor is reportedly assessing windfall taxes on banks and oil companies to plug a £4.7bn gap while avoiding broad tax rises in October’s Budget — options said to include raising and extending the 38 per cent energy levy and a time-limited tax on bank profits. It follows BP’s profits more than doubling on war-inflated oil prices, and a personal warning against a bank tax from JP Morgan’s Jamie Dimon. The Treasury said tax decisions are “for the Chancellor to set out at fiscal events”.
The political appeal writes itself: banks fattened by high rates and oil companies fattened by a war are the two least sympathetic balance sheets in Britain, and taxing them polls far better than touching income tax or VAT — which is precisely what the banks warned the Chancellor about when we reported their pre-Budget lobbying a week ago. The economics are less tidy: windfall levies are one-off answers to structural gaps, the energy levy already has BP selling North Sea assets, and Mr Dimon’s warning carries the implicit mobility of capital. As kite-flying, though, this is deliberate — float the popular option, measure the screams. Watch which kites survive to Budget day; the £4.7bn must come from somewhere, and the alternatives are all noisier.