£45 billion isn't enough says non-profit
British banks are some of the most highly taxed businesses in the world – and as a group they contributed nearly 5% of the government’s total tax take according to PwC figures. But, says at least one group, that’s not enough!
‘Analysis’ suggests that imposing a windfall tax on Britain’s largest banks could yield nearly £15 billion to support Reeves’ planned spending spree. Non-profit London and Brussels based campaign group Positive Money says it has calculated that the UK’s four biggest banks—Barclays, NatWest, Lloyds, and HSBC—are projected to earn a combined profit of £44.7 billion in 2024, based on their recent financial performance.
HSBC reported a significant profit of £6.6 billion for the third quarter of 2023, marking a nearly 10% increase compared to the same period last year. The bank attributed its impressive results to strong trading across several of its global divisions.
Currently, UK banks are subject to a special surcharge on profits, which was originally introduced following the financial crisis. However, the Conservative government recently reduced this surcharge from 8% to 3%. Positive Money argues that if the government were to raise the surcharge to 35%—aligning it with the Energy Profits Levy imposed on oil and gas companies—the Treasury could generate an additional £14.8 billion from the profits of these four banks alone.
Even if the government chose only to reverse its recent cuts to the surcharge and reintroduce the full bank levy, the campaign group estimates that more than £3.5 billion could be added to public funds.
Fran Boait, co-executive director at Positive Money, suggested that a windfall tax would be a sensible way to generate needed funds. “If the government insists on claiming there’s a ‘black hole’ in public finances, then bank profits are a popular, uncontroversial, and frankly sensible place to find the money it needs to support households still reeling from the higher rates which have enriched banks,” she added.
The growing call for a windfall tax on banks comes at a time when high borrowing costs continue to weigh on households. With banking profits expected to shrink as interest rates fall, it remains to be seen whether a raid on profits would just force lenders to increase their margins from mortgage borrowers, or even look at expanding away from the UK, to where taxes are less onerous.
Who or what is ‘Positive Money’
Founded in 2010 by Ben Dyson, Positive Money is a non-profit advocacy group with headquarters in London and operations in Brussels. The organisation emerged after the 2007-2008 financial crisis, focusing initially on fundamental changes to the UK’s monetary system.
Over time, Positive Money has expanded its mission to promote innovative monetary policies, sustainable finance, and central bank reforms.
Since 2013, Fran Boait has served as the executive director, leading the group’s efforts to push for progressive monetary policy initiatives, including digital currencies, green quantitative easing, and what it calls “helicopter money.” Boait holds a Master of Science and a PhD in Geophysics from Cambridge University. Her career has included positions at international organisations such as the United Nations, Greenpeace, and BP. She also serves on the boards of several organisations, including Finance Watch and Common Wealth, and is part of initiatives that focus on financial reform and sustainability. Positive Money advocates for reforms that would limit private banks' ability to create money through lending and instead centralise money creation under the Bank of England.
Their stated goal is to ensure that money issuance better serves the public interest, whether through funding public projects or distributing money directly to citizens.
The group is known for its public campaigns and direct actions, including demonstrations at the Bank of England and petitions aimed at influencing monetary policy. In 2015, Positive Money expanded into European advocacy with its “Quantitative Easing for the People” campaign, eventually leading to the establishment of Positive Money Europe in 2018. This arm of the organisation lobbies European institutions, including the European Central Bank (ECB) and the European Parliament, to promote policies that align monetary policy with social and environmental goals. In 2019, the group achieved significant recognition when it met with ECB President Christine Lagarde.
