Rachel Reeves is under pressure to raise taxes on banks’ significant profits in order to generate funds for the struggling public services in the UK.
The Trades Union Congress (TUC) highlighted that the top four banks have been raking in nearly a billion pounds in profits per week this year. They criticized the Conservative government for reducing the bank surcharge from 8% to 3%.
According to the TUC, reinstating the original 16% surcharge, which was halved by the Conservatives, could yield £20 billion over the next four years. A 35% surcharge, equivalent to the windfall tax imposed on energy companies, could generate £50 billion. Even reverting to the 8% surcharge, considered the minimum by the TUC, would raise £8 billion over four years.
While the Treasury did not dismiss the TUC’s proposals, a spokesperson emphasized the importance of balancing fiscal needs for public services with fostering economic growth to enhance living standards in the upcoming Budget.
TUC General Secretary Paul Nowak expressed concerns over the soaring profits of banks following the cuts to the bank surcharge by the Conservative government. He stressed that it is only fair for banks, benefiting from increased profits, to contribute more in taxes to support essential services like hospitals, schools, and local councils.
The TUC cited data from Positive Money indicating that the top four banks amassed £24.1 billion in profits in the first half of 2025 alone, averaging £0.93 billion per week and £132 million per day.
As major banks like Barclays, NatWest, Lloyds, and HSBC are set to reveal their latest quarterly profits, the call for higher taxes on banks remains a focal point. Former Chancellor Rishi Sunak had previously set the bank surcharge at 3% in 2021, while also raising the corporation tax rate from 19% to 25%, resulting in an overall 28% corporation tax rate for banks by 2023.
