UK banks have just delivered a strong set of half-year results, and that has quickly reignited debate over whether lenders should pay more tax. The country’s four biggest banks — HSBC, NatWest, Barclays and Lloyds — reported combined profits of £29.2bn in the first six months of the year, helped by high interest rates and market volatility linked to the war in Iran. Almost half of that total, £13.7bn, has been earmarked for shareholders through dividends and buybacks.
Those numbers have given fresh momentum to campaigners calling for a levy on bank profits. Supporters of the idea argue that a windfall tax could raise as much as £19bn from the big four lenders alone, money they say could help fund measures to ease pressure on households and support wider government plans on living costs and social care. The TUC’s general secretary, Paul Nowak, said banks can afford to contribute more, while Positive Money urged Andy Burnham to resist pressure from City lobbyists and reclaim what it described as lost billions.
City warnings over lending and investment
Burnham has not said whether he intends to pursue a bank tax, though he said in June that people needed help with rising costs and that he would try to give the country “some breathing space” without putting public finances at risk. The prospect of a new levy has nevertheless put the City on alert. Bank executives say heavier taxation could reduce lending and slow the economy, with some warning that major investment decisions could also be affected.
Jamie Dimon of JPMorgan said the bank had already paid about $10bn in extra taxes and suggested further increases would not be fair. NatWest chief executive Paul Thwaite said higher taxes would hold back lending, while Barclays’ finance chief Anna Cross argued that the banks’ role in supporting UK growth should be taken into account. The issue remains politically sensitive, but the latest profit figures have made it harder to ignore, and the coming argument between government and lenders is likely to be closely watched by investors as well as households hoping for relief from rising costs.
Source: theguardian.com
