Andy Burnham urged to focus on banks’ bumper earnings with windfall tax to ease cost-of-living ache
EXCLUSIVE: Trades Union Congress chief Paul Nowak tells The Mirror in an interview a windfall tax on banks’ profits would be a ‘game changer’ to help those struggling with energy bills
TUC chief urges Andy Burnham to go further and faster on cost of living measures(Image: Thomas Krych/ZUMA Press Wire/Shutterstock)
Andy Burnham has been urged to ease the cost-of-living pain by slapping a windfall tax on the eye-watering profits of the big banks at next month’s Budget.
Paul Nowak – one of the country’s most powerful union figures – welcomed the new Prime Minister’s cost-of-living blitz in his first weeks in Downing Street. But in an interview with The Mirror, the Trades Union Congress (TUC) chief said Mr Burnham and his Chancellor John Healey must go “further and faster” on the cost of living.
Ahead of his organisation’s annual Congress in Brighton this weekend, the TUC has published new polling showing 68% of voters support cutting energy bills with a tax on banks’ profits. It is among the measures the TUC are calling for at the crunch Budget on October 28.
Mr Nowak told The Mirror the measure could be “a real game-changer in terms of supporting people with those heating bills, at the same time as driving down on inflation” He said: “It’s less than two decades since we bailed the banks out during the financial crash. I don’t think it’s unfair to ask the banks to help out the British public at a time when their profits are absolutely soaring.
“And they’re not soaring because they’ve become incredibly competitive overnight or leaner, meaner organisations. It’s because interest rates are high. They’ve done well out of Trumpflation. While our members have been hit by it, they’ve done well, so I think it’s right to ask them to pay a fairer share.”
He added: “I think what’s clear is Britain’s banks are doing incredibly well at the moment. I mean, a billion pounds a week for the big four banks between them every single week. The biggest ever bonus pool in the City of London last year: £25billion.”
Britain’s ‘big four’ banks – HSBC, Lloyds Banking Group, Barclays and NatWest – announced over the summer combined half-year pre-tax profits jumped to more than £29billion. Their estimated annual haul is £55.3bn, equal to about £1,750 a second.
Earnings have been partly fuelled by the Middle East war, which has driven up energy and other household bills and kept interest rates elevated for longer. The TUC argued over the summer increasing the surcharge paid on banks’ profits – on top of the 25% corporation tax they pay – could raise billions.
Reinstating the 2023 rate under the Tories alone would bring in £9billion over four years while a 16% charge could bring in £24billion and 35% a staggering £60billion. The TUC has proposed the cash could be used to help fund a social tariff to cut typical bills by between £345 and £517 a year for millions of households.
The TUC boss said it will be for the PM and Chancellor to “make judgements about where the right level sits.” But he added: “What is clear – if you’re paying out £25 billion in bonuses, you can afford to pay a little bit more in tax.”
Pressed on whether the government should also end the Tories’ freeze on income tax thresholds – a plan abandoned by ex-Chancellor Rachel Reeves – Mr Nowak said it was a concern of a lot of working people. But he added: “I think it’s very hard to see how the government can move on that in the short term.
“But, you know, looking ahead, you want to sort of rebalance our tax system away from taxing work to taxing wealth. And at the moment, it often feels for the people that we represent—working people who go out and work hard each and every day—that their taxes go up. But if you’re generating your income from shares or from property, your taxes don’t. So, I think that rebalancing has got to be part of it.”
Mr Nowak also said there was a case for looking at “more effective taxes on wealth” ahead of next month’s crunch Budget, which could include equalising capital gains tax with income tax. He added: “I think people would expect there to be a level playing field for those who are incredibly asset-rich, and who, as I say, effectively can find clever ways to avoid paying tax, and those who go to work every single day where we’ve got no option — it’s PAYE.
“So, yeah, more effective taxes on wealth, absolutely. You know, I think there are a whole range of options the government could look at.”
While Mr Burnham announced policies in the summer to give families breathing space – including cutting VAT on electricity bills – Mr Nowak said: “I think the key message for the Prime Minister is he needs to go faster and further to help people through the cost-of-living crisis. Clear poll after poll shows that the number one issue that the British public care about is the cost of living.”
He added: “The Prime Minister has done some important things, like breathing space policies, as he described them, you know, VAT on energy bills, a cap on bus fares—all welcome stuff. But we think he needs to go further and faster, and he needs to demonstrate with every single decision he takes, including right up to the budget and beyond, that he’s on the side of working-class people and their families and communities.”
