TUC: Tory tax break for banks cost HMT £6bn 

The union body says the reduction in the surcharge from 8% to 3% boosted cash windfalls for banks - and left the public finances without urgently needed revenues. 

At the same time, sky-rocketing interest rates have boosted banks’ profits even more - resulting in Britain's biggest four banks posting pre-tax profits of £29 billion in the first half of this year.

While the banks are "swimming in profits", rising interest rates have meant "mortgage misery" for working people, the TUC says.

The union body says that "it's high time banks paid their fair share" - highlighting how even Margaret Thatcher imposed a windfall tax on banks when faced with a similar situation.

Lost income  

New analysis from the TUC shows that in the three years since Sunak cut the bank surcharge from 8% to 3%, the UK has lost out on £6bn of tax revenue, or an average of £2bn a year.

Even if surcharge was only reinstated to its previous level, TUC analysis shows that the annual revenues for the Treasury would now be even higher – reaching £2.25 billion per year due to high interest rates and rising bank profits. 

With banks pocketing record profits, the surcharge should now be increased beyond its pre-2023 level, the TUC says.

Taxing banks to cut bills

Prime Minister Andy Burnham has been “quick out the blocks” with policies aimed at giving people some breathing space – including scrapping VAT on energy bills, says the TUC. And with profits booming, banks can afford to pay more, says the TUC. 

Asking banks to pay their fair share in taxes is “plain common sense”, the TUC says. On Tuesday, a senior bank executive was quoted in the FT recognising that arguing against taxes on banks is an “uphill battle”. 

Others were quoted saying that “it’s tough to argue against it when we are all making so much money”, and that it’s unlikely the impact would be “material for anyone”. 

The TUC is calling for the government to "reverse disastrous Tory policies" of cutting taxes on banks, and to go further - increasing the surcharge to raise up to £60 billion over the next four years. 

The union body is calling for the revenues from the windfall tax to be used to fund a social tariff aimed at cutting energy bills for the majority of households.

Even the bare minimum of reversing the Tory cuts and setting it at 8% would raise £9bn over the next four years (£2.25bn a year).

TUC General Secretary Paul Nowak said: 

"The Tories' tax break for banks has cost the UK public purse £6 billion and counting. It’s time to end it and to make sure banks pay their fair share 

"At a time when families are struggling with soaring energy costs, taxing banks’ booming profits to cut bills is just plain common sense.   
“There is a mountain of evidence to suggest that banks can afford to pay more tax – not least the record £25bn bonus pool they paid out last year.  

"This month’s Budget is an opportunity to put things right.”

ENDS

Notes to editors:

Tory tax cut cost to the country:

 
Methodology: TUC analysis of HMRC corporate tax receipts from the banking sector: https://www.gov.uk/government/statistics/paye-and-corporate-tax-receipts-from-the-banking-sector-2026 

TUC report on social tariff: https://www.tuc.org.uk/sites/default/files/2026-05/Domestic_energy_support_policy_proposal.pdf

- About the TUC: The Trades Union Congress (TUC) exists to make the working world a better place for everyone. We bring together the 5.3 million working people who make up our 47 member unions. We support unions to grow and thrive, and we stand up for everyone who works for a living.