The Guardian view on the banks: too big to fail cannot mean too big to tax
Financiers owe their windfalls and bonuses to higher interest rates. Britain should reclaim more for the public and resist City lobbying
TL;DR
- Chancellor John Healey plans to tax British banks in the upcoming budget.
- British banks made £29bn in the first half of this year, a 20% increase from 2025, due to higher interest rates.
- The proposed tax could restore the bank surcharge from 3% to 8%, potentially raising £2bn annually.
- Banks argue they face higher taxes than other companies and that profits may not be sustainable.
- The article contends that banks' tax burdens are less than those of oil and gas companies.
- Positive Money reports that households lost £44bn in deposit interest in 2025.
- Margaret Thatcher taxed banks' windfalls in 1981; a similar levy today could raise over £11bn.
- Spain has successfully levied a windfall tax on banks, which could generate £19bn from UK banks.
- The article criticizes high bankers' bonuses and suggests that much financial sector activity is detrimental to economic performance.
- Taxpayers bailed out banks after the 2008 financial crisis, implying public obligations.