Scottish Labour leader Michael Marra has urged Chancellor John Healey to use his Budget announcement this week to increase taxes on the UK's biggest banks. Marra argued the Chancellor must make "progressive choices on tax" to protect public services and help families struggling with the cost of living.
Marra to meet Healey ahead of Budget
Marra will travel to London before the Budget, which will be announced in the Commons on Wednesday, to meet with the Chancellor and Miatta Fahnbulleh, the UK Energy Secretary. The UK's "big four" banks - HSBC, NatWest, Barclays and Lloyds - collectively made £15 billion in profits during the first six months of this year, with trade unions also calling for them to face additional taxes.
Healey is under pressure to find money to help people with the rising cost of living and to fund spending on defence. However, Labour's 2024 election manifesto pledged not to raise the rates of income tax, VAT or National Insurance.
Progressive tax choices
Writing in his regular column for the Record, Marra said: "Labour governments should make progressive choices on tax." He noted that Labour has already asked the wealthiest to pay more, taxing private jets, private schools and private equity to raise revenue for public services like the NHS.
Marra added: "Our financial services sector is strong and internationally competitive, so much so that in the first six months of this year the biggest banks have made around £15 billion of profits. That didn't come in efficiency savings but mortgage rates way outstripping the base rate and savings rates not doing so. When people are struggling to afford to turn up the heating, we should ask big business to do their bit. Especially when they are seeing windfall profits. The banks paying their fair share would be a good place to start to fund measures that give people a bit of breathing space."
Bank profits and tax surcharge
Banks in the UK have seen profits soar in recent years as a result of being able to charge higher interest rates on loans and mortgages. Healey is said to be considering whether to reverse a reduction in the surcharge that banks pay on corporation tax. Former Tory chancellor Jeremy Hunt slashed the rate from eight per cent to just three per cent in 2023.
Paul Nowak, General Secretary of the TUC, has urged the Chancellor to help ordinary working families. "Households up and down the country are up against it - and with no end in sight to Trump's illegal war in the Middle East, they are facing an energy bill crisis this winter with prices set to soar further still," he said. "The Government has to act. With the big four banks enjoying profits of over £1bn a week between them, it's time to tax those enormous profits to cut energy bills for the majority of households."
But UK Finance, which represents the banks, warned that "further increases in bank taxes would weaken competitiveness, discourage investment and job creation, and work against the government's ambition to deliver growth in every postcode".
