TUC – “eye-watering” bank profits shows “folly” of slashing bank surcharge

Commenting on today’s (Thursday) record annual profits at Lloyds and yesterday’s record profits for HSBC, TUC General Secretary Paul Nowak said:  

“These eye-watering profits will be met with disbelief – especially when millions are struggling to make ends meet.  

“The government has allowed banks to cash in on sky-high interest rates and to benefit from people’s mortgage misery. 

“Rishi Sunak’s decision to slash the banking surcharge has been a huge gift to the City. 

“Instead of fixing our crumbling schools and hospitals the PM has handed banks a monster tax break. 

“This is an act of folly.” 

Cutting the banking surcharge from 8% to 3% last April has allowed banks to make huge profits from rising interest rates and cushioned them from the increase in corporation tax rates that came in this year. 

While other businesses have seen their corporation tax rates rise by up to 6%, banks have seen an extremely modest rise of 1% thanks to the cut in the surcharge. 

The TUC estimates (based on the latest OBR forecasts) that Treasury will lose £10bn over the next five years as result of the banking surcharge being cut. 

The decision to cut the surcharge was taken by Rishi Sunak when he was Chancellor.