Profits at banks including NatWest, Lloyds and Barclays have been buoyed in recent years by higher interest rates, sending their share prices surging.<\/p>\n
Paul Nowak, the leader of the Trades Union Congress (TUC), said the new Labour MP for Makerfield, who is widely expected to replace Keir Starmer as prime minister, should ignore \u201cvested interests\u201d and urged Burnham to plot a radical change in course.<\/p>\n
Any tax raid could be used to fund Andy Burnham\u2019s package for struggling households this winter. Photograph: Temilade Adelaja\/Reuters<\/p>\n
\u201cWhen one in five people are skipping meals, you can\u2019t afford to be held hostage by people defending the status quo,\u201d he told the Guardian. \u201cI would hope it (higher taxes on banks) is the type of policy a new prime minister would look at and say, there is real value there.<\/p>\n
\u201cWe can\u2019t ask working people to pay more tax, so we need a system that is better at taxing wealth and windfall profits.\u201d<\/p>\n
The TUC said Burnham could raise \u00a39bn over four years by reversing a decision made by the previous Conservative government to cut a surcharge on the banking industry.<\/p>\n
But a tax raid would pit the former Greater Manchester mayor against bankers, who argue they already pay uncompetitive tax rates in the UK and feel they are being penalised for their success.<\/p>\n
\u201cA bank tax isn\u2019t an economic policy, it is economic suicide,\u201d a senior banker told the Guardian. \u201cFinancial services is one of the only parts of the economy that is growing and highly productive. We need more sectors to do the same, not be taxed for being successful. The TUC needs to grow up.\u201d<\/p>\n
It revives a years-long battle by the industry, which lobbied hard against fresh hikes in chancellor Rachel Reeves\u2019s budget last autumn, at a time when banks were again being accused of taking large profits on the back of rising interest rates. Profits have been boosted in part by an increase in net interest income, which is the difference between what a bank charges for loans and what it pays in interest on deposits.<\/p>\n
Bank profits graph<\/a><\/p>\n NatWest, the lender formerly known as Royal Bank of Scotland, reported \u00a37.7bn in pre-tax profits in 2025, up 24% from a year earlier and marking its highest profits since its 2008 taxpayer bailout. Rival Lloyds Banking<\/a> Group\u2019s pre-tax profits jumped 12% to \u00a36.7bn for 2025, while Barclays\u2019 profits climbed 13% to \u00a39.1bn, allowing its bosses to plan \u00a315bn worth of payouts to shareholders between 2026 and 2028.<\/p>\n One City executive said the tax issue \u201chas been a concern ever since the general election in 2024\u201d but has reared its head again in recent months, as interest rates started to rise in response to the US-Israeli war on Iran.<\/p>\n
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