TUC General Secretary Paul Nowak is calling on Andy Burnham to impose an additional windfall tax on London banks worth up to £60 billion to help reduce energy bills for lower-income households.
Details of the proposed tax hike
Mr Nowak urged Mr Burnham, who is widely expected to become Prime Minister, to significantly raise the bank surcharge. The TUC has outlined several options for the Treasury, including reversing cuts to the bank surcharge from 3% back to 8%, which would raise £9 billion over four years. A further option would increase the surcharge to 16%, raising an extra £24 billion over four years. The most aggressive proposal would raise the surcharge to 35%, matching the windfall tax imposed on energy companies by the Conservatives, generating an additional £60 billion over four years.
Speaking to Sky News, Mr Nowak said: “Our big four banks in this country are making something like a billion pounds in profits every single week. We had a record year for bankers' bonuses last year in the City of London. I don't think it's unfair to ask those with the broadest shoulders to help out families who are going to struggle with those heating bills.”
Political reactions and warnings
Shadow Chancellor Sir Mel Stride cautioned against further tax rises, stating: “At a time when our economy is faltering and businesses have been hammered by this Labour government, the last thing Britain needs is yet more tax rises. Andy Burnham should ignore the unions and rule out more damaging taxes. Labour need to realise that you can’t tax your way to prosperity.”
London Mayor Sir Sadiq Khan has already warned Mr Burnham against cutting funding for the capital, amid concerns that a Burnham government may be anti-London. Additionally, hundreds of thousands of Londoners could see their property tax bills rise by £1,000 a year under reforms previously backed by Mr Burnham.
Current tax contributions and fiscal context
Banks in Britain paid more than £11 billion in taxes in 2024/25 through the bank levy, tax surcharge, and corporation tax. Treasury minister Dan Tomlinson, MP for Chipping Barnet, defended the government's fiscal policy, saying: “If you add up all the taxation from the wealthiest, compare the start of the Parliament to the end of the Parliament, we're going to be raising £30 billion more from wealth taxes and the wealthy.” He declined to comment on banking taxes specifically.
Mr Burnham is seeking to reassure markets that his government will not embark on an unfunded spending spree, amid warnings that the cost of borrowing, including mortgages, could rise if he does. He is widely expected to replace Rachel Reeves as Chancellor. Speaking at the British Chambers of Commerce’s annual global conference in central London, Ms Reeves urged her successor to stick to her economic plans and fiscal rules, saying: “I hope that whoever is Chancellor in the future, whenever that future may be, sticks to what I’m doing because it is beginning to bear fruit, and we are seeing that investment return to the economy, that growth return to the economy, and crucially, that stability, so that businesses can plan and invest in the future.”
Potential successors and cabinet speculation
Net Zero Secretary Ed Miliband and Ilford North MP Wes Streeting have both been mentioned as possible successors to Ms Reeves, though there is also talk that Mr Burnham’s top team, including the Chancellor, may all be women.
