Labour’s Rachel Reeves is under pressure to hike up taxes on banks’ substantial profits to generate funds for the UK’s struggling public services. The Trades Union Congress (TUC) highlighted that the major four banks have been raking in close to a billion pounds per week in profits this year. Criticism was directed at the Conservatives for reducing the bank surcharge from 8% to 3%.
The TUC proposed reinstating a 16% surcharge, double its previous level before the Conservative cuts, which could yield £20 billion over the next four years. Alternatively, a 35% surcharge, aligning with the windfall tax imposed on energy companies by the Conservatives, could generate £50 billion. Returning the surcharge to 8%, considered by the TUC as the minimum, would raise £8 billion over four years.
Although the Treasury did not outright reject the TUC’s recommendations, a spokesperson emphasized the importance of finding a balance in the Budget to fund public services adequately while promoting economic growth for improved living standards.
TUC General Secretary Paul Nowak emphasized the need for banks to contribute more in taxes given their substantial profits, suggesting that investing these additional funds in hospitals, schools, and local councils is a fair approach. He criticized the Tories for benefiting banks through high interest rates and advocated for a fair share of taxation to support national rebuilding efforts.
Citing data from Positive Money, the TUC highlighted that the top four banks collectively made £24.1 billion in the first half of 2025, averaging £0.93 billion weekly and £132 million daily. This revelation comes ahead of Barclays, NatWest, Lloyds, and HSBC announcing their latest quarterly profits.
In a previous move, then-Chancellor Rishi Sunak had set the bank surcharge at 3% in 2021. Additionally, he announced an increase in the corporation tax rate from 19% to 25%, leading to a 28% overall tax rate for banks in 2023.