Andy Burnham is facing calls to increase taxes on major banks as projections indicate that the largest lenders in Britain are on track to generate profits of approximately £55 billion this year.
Critics argue that banks are reaping significant benefits from the current cost of living crisis, primarily due to higher interest rates and profits from reserves held in the Bank of England. They are now advocating for action from the new Prime Minister, Andy Burnham, and Chancellor John Healey.
The push for higher taxes on banks is expected to gain momentum with the upcoming release of half-year results by banks in the next two weeks, confirming another round of substantial profits.
Barclays is set to kick off the reporting season, with analysts forecasting a £700 million profit increase in the first half of 2026 to £5.9 billion. This will be followed by Lloyds Banking Group and NatWest, both expected to report profits of £4.1 billion each. HSBC will unveil its results the following week, with estimates pending.
Collectively, the four major banks are projected to amass profits of £55.3 billion for the year, a sharp rise from the previous year, equivalent to approximately £1,750 per second.
Positive Money’s co-executive director, Sara Hall, emphasized the need to tax banks’ windfall profits to address the cost of living crisis and support households across the country. The Trade Union Congress (TUC) recommends increasing the surcharge on banks’ profits, suggesting that raising it to 8% could generate £9 billion over four years.
TUC general secretary Paul Nowak highlighted the importance of using taxes on banks to alleviate the burden of rising energy bills for the majority of the population. Lord O’Neill cautioned against imposing additional taxes on businesses, while recent data revealed that banks paid out £16.4 billion in bonuses in the first quarter of this year.
In response, a spokesperson for UK Finance, the banking trade body, emphasized the sector’s substantial contribution to the UK’s public finances, citing over £43 billion in taxes paid last year. They cautioned that increasing sector-specific taxes could hinder the UK’s global competitiveness and investment attractiveness.
