The Trades Union Congress (TUC) has intensified calls for the UK government to reinstate a higher windfall tax on banks after the country’s four largest lenders—Barclays, HSBC, Lloyds, and NatWest—revealed a combined first-quarter profit of £14 billion. The union advocates raising the current bank surcharge rate from 3% back up to 8%, reversing the cut implemented by the Conservative government in 2023.
Paul Nowak, general secretary of the TUC, emphasized the fairness of taxing banks more heavily amid soaring profits and widespread financial struggles faced by ordinary households and businesses. “It’s common sense that banks, which are raking in billions, contribute more in taxes to support those who are struggling,” Nowak stated.
He also highlighted the broader economic context, linking the banks’ profits to turmoil caused by international conflicts. “With ongoing global instability triggering economic chaos, banks’ strong earnings should be fairly taxed to protect households and firms from these adverse impacts,” he added.
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Following the reduction of the bank surcharge tax, major lenders have benefited from rising interest rates, leading to a bonanza in profits. Nowak warned that if high interest rates persist, banks stand to increase their earnings even further. Reflecting on recent history, he said, “The last shock caused by Putin’s illegal invasion of Ukraine triggered bumper paydays for banks at the expense of mortgage payers. We must ensure this does not happen again.”
Among the big four, HSBC reported a slight decline in pre-tax profits to $9.4 billion (£6.96 billion) in the quarter, down from $9.5 billion the previous year. The dip was attributed to greater expected credit losses, other impairment charges, and higher operating costs. HSBC also agreed to pay around 300 million euros (£260.6 million) to French authorities to settle a dividend fraud case related to trading activities from 2014 to 2019. Despite the profit dip, HSBC’s revenue rose 6% to $18.6 billion (£13.7 billion), fueled by strong returns from its wealth management sector and Hong Kong operations.
This surge in profits from the UK’s leading banks has reignited debates over fair taxation and the role of financial institutions in supporting the broader economy during turbulent times.