The government has been urged to reinstate a windfall tax on banks after a surge in profits. A union wants the rate returned from 3% to 8% after the big four UK lenders — Barclays, HSBC, Lloyds and NatWest — revealed an eye-watering £14bn total profit in the first quarter.
The Trades Union Congress (TUC) renewed its call for an increase in the current bank surcharge, which was reduced from 8% to 3% of profits above £100m by the Conservative government in 2023.
“Getting banks to pay more tax on their profits is plain common sense when they’re raking in billions and the rest of the country is struggling to get by,” said Paul Nowak, general secretary of the TUC.
Economic impact of global events
“With Donald Trump’s war abroad unleashing economic chaos at home, it’s only right that banks’ bumper profits are taxed fairly and used to shield households and firms from the damaging impacts of the war,” Nowak added.
“After the Tories cut the bank surcharge tax, banks enjoyed a profits bonanza because of high interest rates,” said Nowak. “Now they could be set to make even more if interest rates remain high for longer. The last economic shock caused by Putin’s illegal invasion in Ukraine led to a bumper payday for banks at the expense of mortgage payers – we can’t allow the same thing to happen again.”
HSBC reports mixed results
HSBC reported a marginal dip in pre-tax profits to $9.4 billion (£6.96 billion) for the first quarter, down from $9.5 billion a year prior. The decline was attributed to higher expected credit losses, other credit impairment charges, and increased operating expenses. HSBC agreed to pay approximately 300 million euros (£260.6 million) to French authorities to settle a dividend fraud case, concluding a probe into its trading activity between 2014 and 2019. Despite the profit dip, the bank's revenue climbed 6 per cent to $18.6 billion (£13.7 billion), driven by strong performance in wealth management and its Hong Kong business segment.
