Rachel Reeves is facing pressure to raise taxes on banks’ substantial profits to generate funds for the struggling public services in the UK.
The Trades Union Congress (TUC) highlighted that the top four banks have been collectively earning close to a billion pounds per week in profits this year. The TUC criticized the Conservative government for reducing the bank surcharge from 8% to 3%.
According to the TUC, reinstating the surcharge to its previous level of 16% would result in £20 billion over the next four years. A surcharge of 35%, equivalent to the windfall tax imposed on energy companies by the Conservatives, could generate £50 billion.
Returning the surcharge rate to 8%, which the TUC considers the minimum acceptable level, would raise £8 billion over four years. The Treasury did not dismiss the TUC’s suggestions but emphasized the importance of balancing public service funding with economic growth in the upcoming Budget.
TUC General Secretary Paul Nowak underscored the impact of bank profits on society, stating that banks should contribute more through taxes to support essential services like hospitals, schools, and local councils.
The TUC referenced data from Positive Money, indicating that the top four banks made £24.1 billion in the first half of 2025, translating to £0.93 billion weekly and £132 million daily. This information precedes the quarterly profit announcements of Barclays, NatWest, Lloyds, and HSBC this week.
Former Chancellor Rishi Sunak had set the bank surcharge at 3% in 2021. He also announced an increase in the corporation tax rate from 19% to 25%, raising the overall rate for banks to 28% in 2023.
The push for higher bank taxes aligns with the ongoing economic recovery needs and the call for sustained investments after years of austerity measures. The TUC advocates for a fairer contribution from banks to aid in rebuilding and advancing the country’s infrastructure and services.