{"id":797205,"date":"2026-10-09T17:00:11","date_gmt":"2026-10-09T17:00:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/797205\/"},"modified":"2026-10-09T17:00:11","modified_gmt":"2026-10-09T17:00:11","slug":"tory-tax-break-for-banks-has-cost-uk-public-purse-6bn-says-tuc-banking","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/797205\/","title":{"rendered":"Tory tax break for banks has cost UK public purse \u00a36bn, says TUC | Banking"},"content":{"rendered":"

Tax cuts for big banks have deprived the UK government of \u00a36bn in revenues, according to campaigners, who are calling on the chancellor, John Healey<\/a>, to increase taxes and force lenders to pay their \u201cfair share\u201d in the budget.<\/p>\n

Calculations by the Trades Union Congress (TUC), which represents unions with more than 5.3 million members across England and Wales, shows that the public purse is billions of pounds worse off as a result of tax cuts introduced under the Tory chancellor Jeremy Hunt in 2023.<\/p>\n

The then government agreed to slash the bank surcharge \u2013 an additional levy on lenders\u2019 profits \u2013 from 8% to 3% that year. The move was meant to offset a rise in corporation tax from 19% to 25%, after the industry argued higher taxes would put them at a competitive disadvantage<\/a> compared with other big financial centres such as New York.<\/p>\n

However, the cuts came just as lenders started reaping handsome earnings, thanks to rising interest rates<\/a>. The UK\u2019s four largest lenders \u2013 HSBC, NatWest, Barclays, Lloyds Banking Group \u2013 have now generated \u00a3200bn in pre-tax profits over the past five years.<\/p>\n

The TUC says the 2023 cuts ultimately robbed the UK purse of tax revenues. Its analysis of HMRC corporate tax receipts shows the UK public lost out \u00a32.3bn in 2023-24, a further \u00a31.7bn in 2024-25, and \u00a32bn in 2025-26 \u2013 totalling \u00a36bn over three years.<\/p>\n

With banks pocketing record profits, the TUC said the surcharge should now be increased beyond its pre-2023 level at the 28 October budget. That could raise up to \u00a360bn, which could be used to cover rising household bills as part of prime minister Andy Burnham\u2019s drive to tackle the cost of living.<\/p>\n

\u201cThe Tories\u2019 tax break for banks has cost the UK public purse \u00a36bn and counting. It\u2019s time to end it and to make sure banks pay their fair share,\u201d the TUC\u2019s general secretary, Paul Nowak, said.<\/p>\n

\u201cAt a time when families are struggling with soaring energy costs, taxing banks\u2019 booming profits to cut bills is just plain common sense. There is a mountain of evidence to suggest that banks can afford to pay more tax \u2013 not least the record \u00a325bn bonus pool they paid out last year.<\/p>\n

\u201cThis month\u2019s budget is an opportunity to put things right.\u201d<\/p>\n

Bank bosses have been lobbying intensively against bank tax rises, after narrowly escaping higher levies during last year\u2019s budget. Jamie Dimon, chief executive of the largest US bank, JP Morgan, warned Burnham and Healey<\/a> against further levies during a meeting last month, saying it could put investment and jobs at risk.<\/p>\n

Earlier this year, Dimon warned that he could scrap plans for a new \u00a33bn London headquarters<\/a> if the UK government became hostile to banks.<\/p>\n

The TUC has said raising the surcharge to 16% \u2013 double the rate prior to Conservative cuts \u2013 could raise \u00a324bn in tax revenues over the next four years. Meanwhile, a 35% bank surcharge, which would match the windfall tax rate that Conservatives imposed on energy companies, would deliver \u00a360bn over four years. Even reversing the surcharge cuts and setting it at 8% would raise \u00a39bn over that same period, the union body said.<\/p>\n

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\u201cReversing the last government\u2019s tax cuts is the very least this government can do to claw back some of the lost billions it\u2019s handed to banks in recent years,\u201d said a spokesperson for campaign group Positive Money, which has also been pushing for bank tax rises at the budget. \u201cBanks are making record profits without lifting a finger, thanks to the higher rates being paid to them, by both customers and the Bank of England.\u201d<\/p>\n

David Postings, the chief executive of banking lobby group UK Finance said that a strong banking sector was essential for a strong UK economy and that profitable lenders would be able to invest in better services for customers, issue more loans, and deliver \u201creturns\u201d \u2013 such as shareholder dividends \u2013 that supported people\u2019s savings and pensions.<\/p>\n

\u201cBanks also make a major contribution to the public finances and already face a materially higher total tax rate in the UK than in other leading financial centres,\u201d he said.<\/p>\n

\u201cFurther tax increases would weaken the UK\u2019s competitiveness, discourage investment and job creation, and work against the government\u2019s ambition to deliver growth in every postcode.\u201d<\/p>\n

The Treasury was contacted for comment.<\/p>\n","protected":false},"excerpt":{"rendered":"Tax cuts for big banks have deprived the UK government of \u00a36bn in revenues, according to campaigners, who…\n","protected":false},"author":2,"featured_media":797206,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[84,59,56,54,55],"class_list":["post-797205","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-gb","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/797205","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=797205"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/797205\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/797206"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=797205"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=797205"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=797205"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}