Bank Tax Break Has Cost the Public £6bn, Says the TUC
The 2023 cut to the bank surcharge, from 8% to 3%, has cost £2.3bn, £1.7bn and £2bn in successive years on the TUC’s reading of HMRC receipts. Over the same period the four largest banks made £200bn of pre-tax profit and paid a record £25bn bonus pool. The union wants the money used to cut energy bills.
The surcharge was cut to offset corporation tax rising from 19% to 25%, so the banks were meant to end up roughly where they started. The TUC’s argument is that the offset overshot. Its general secretary Paul Nowak puts the ask directly at the chancellor: “The Tories’ tax break for banks has cost the UK public purse £6bn and counting… At a time when families are struggling with soaring energy costs, taxing banks’ booming profits to cut bills is just plain common sense.” Three options are costed. Setting the surcharge at 16% would raise about £24bn over four years; matching the 35% energy windfall rate would raise £60bn; simply restoring 8% would raise £9bn. This is a union’s own analysis rather than an independent assessment, which is a different class of claim from a contested fact and should be read as advocacy with arithmetic attached. The counter-pressure is already in the room. Jamie Dimon of JP Morgan warned the prime minister and the chancellor against further levies at a meeting last month, and earlier this year suggested he could abandon a planned £3bn London headquarters. John Healey has three weeks to decide which of those two arguments he finds more persuasive, and the gilt market has spent this week reminding him that the Budget needs funding either way.