Healey set to raise taxes on UK banks to cover Middle East war costs
Chancellor John Healey plans to reverse bank surcharge cuts made by Jeremy Hunt, raising over £2bn annually.
John Healey is preparing to raise taxes on Britain's banks to help offset damage to government finances from the Middle East conflict. The option under discussion is reversing cuts to the bank surcharge made by Jeremy Hunt, which would raise over £2bn a year.
The surcharge would likely rise from 3% back to 8%. UK banks have logged strong earnings as interest rates climbed, with the four largest lenders generating £200bn in pre-tax profits over the past five years.
Unions and thinktanks have pushed for higher bank taxes, though the previous chancellor rejected the idea out of concern it would deter investment. Bank bosses have been lobbying against the move, warning it could force them to cut UK staff and shift operations overseas.
- £200bn
- Four largest banks pre-tax profits
- £2bn
- Expected annual revenue from reversal
- 3%
- Current bank surcharge rate
- 8%
- Proposed bank surcharge rate
Why it mattersThe move would help offset damage to government finances from the Middle East conflict.
AustraliaNo direct Australian effect yet, but if major economies raise financial sector taxes, it could eventually influence Australian banking regulation and policy.
Corroborated bythetimes.com
✓ Claims checked against the source and corrected before publish. checked 2 h ago
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