Reinstate windfall tax on banks after surge in profits, TUC urges
Summary
Trade union leaders in the UK want to increase the tax on big banks after they reported nearly £14 billion in profits in the first three months of 2026. They say banks benefited from rising interest rates and want the extra tax money to help people and businesses affected by the Iran war’s economic impact.Key Facts
- The UK’s four biggest banks—Barclays, HSBC, Lloyds, and NatWest—made £13.8 billion in profits in the first quarter of 2026.
- The current bank surcharge tax on profits over £100 million was cut from 8% to 3% in 2023 by the Conservative government.
- The Trades Union Congress (TUC) wants to restore the bank surcharge to 8%, which could raise £9 billion over four years.
- Doubling the surcharge to 16% could bring in £24 billion over four years, according to the TUC.
- The Bank of England recently kept interest rates at 3.75%, with markets expecting further rises this year.
- Higher interest rates have increased mortgage costs in the UK, from 4.83% to 5.77% on average for two-year fixed rates since the Iran conflict began.
- Lloyds Banking Group reported a 33% increase in profits to £2 billion, explaining that banks expected better profits with rising rates.
- The TUC says banks’ increased profits come at a time when many people struggle with higher living costs and that fair taxation could help protect households and firms.
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