Labour Party member Rachel Reeves is facing pressure to raise taxes on banks’ substantial profits to generate funds for the UK’s struggling public services.
The Trades Union Congress (TUC) pointed out that the leading four banks have been raking in nearly a billion pounds in profit per week this year. The TUC criticized the Conservatives for reducing the bank surcharge from 8% to 3%.
According to the TUC, reinstating the surcharge to 16%, double its original level before the Conservative cuts, could result in £20 billion over the next four years. A 35% surcharge, equivalent to the windfall tax imposed on energy companies by the Conservatives, could generate £50 billion.
Returning the surcharge to 8%, which the TUC considers the minimum acceptable level, could raise £8 billion over four years. While the Treasury did not outright reject the TUC’s proposal, a spokesperson emphasized the need to strike a balance in the Budget to fund public services and promote economic growth.
TUC General Secretary Paul Nowak highlighted that following the Conservative cuts to the bank surcharge, high interest rates have led to a significant increase in bank profits. He stressed the importance of banks contributing more through taxes to support investments in hospitals, schools, and local councils.
The TUC cited data from Positive Money, showing that the top four banks accumulated £24.1 billion in the first half of 2025, translating to £0.93 billion weekly and £132 million daily. The upcoming quarterly profit announcements from Barclays, NatWest, Lloyds, and HSBC are anticipated in light of these figures.
In 2021, then-Chancellor Rishi Sunak set the bank surcharge at 3% and raised the corporation tax rate from 19% to 25%, resulting in a 28% overall rate for corporation tax on banks in 2023.
As demands for increased contributions from banks grow, the focus remains on addressing the long-lasting effects of austerity and the need for sustained investments to rebuild the country.