HSBC’s £14.5billion revenue bonanza sparks calls for for windfall tax raid on large banks
The TUC says there is a “mountain of evidence” for new PM Andy Burnham and Chancellor John Healey to announce a windfall tax on banks’ booming profits in the autumn Budget
Britain’s ‘ big four’ banks are on track to make more than £55billion profit this year(Image: Getty Images)
Pressure is growing for Andy Burnham to slap a new windfall tax on big banks after a £29billion profit bonanza.
HSBC fuelled calls for the new PM and Chancellor John Healey to target lenders in the autumn Budget as it announced half year profits surged by almost a quarter to £14.5billion.
It follows a bumper round of results from rivals Lloyds Banking Group, Barclays and NatWest, boosted by higher for longer interest rates. The ‘big four’ have together made more than £29billion in the space of just six months.
One reason interest rates haven’t come down is due to higher inflation on the back of the Middle East war and the energy shock. The TUC has called for a windfall tax on banks to help bring down energy bills for millions of UK households.
The union body wants the government to use the money to pay for a social tariff that, it claims would bring down energy bills by up to £559 a year for those on low and middle incomes.
TUC General Secretary Paul Nowak said: “There is now a mountain of evidence to suggest that banks can easily afford to pay more tax. While higher interest rates have meant mortgage misery and bigger bills for the rest of us, the big banks have been rolling in it.
“Andy Burnham has rightly prioritised cost of living measures in his first days as prime minister, but as the war in Iran rumbles on energy prices will rise further – and the government will need to do more to protect households. That’s why it’s time to increase the tax on bank profits to cut bills. It’s common sense and it’s the right thing to do.”
The four big banks combined are estimated at this stage to make £55.3billion profit for the whole year, up sharply from 2025, and equivalent to around £1,750 every second.
The TUC argued for an increase in the 3% surcharge on banks’ profits, which is on top of the 25% corporation tax they pay. Upping it to 8% – reversing a cut by the Tories – could raise £9billion over four years, it says, while doubling it to 16% would rake in an estimated £24billion.
A 35% surcharge, which would be the same level as the windfall tax the Conservatives imposed on energy companies, would deliver £60billion over four years, the TUC has already said.
Campaign group Positive Money claims a windfall tax on would raise £19billion from the big four banks alone if announced in the autumn Budget, enough to cover the cost of Mr Burnham’s VAT cut from electricity bills, the £2 cap on bus fares, and the business rates cut for pubs, clubs and music venues more than 13 times over.
Sara Hall, co-executive director at Positive Money, said: “Interest rate rises have landed us in a lose-lose situation: not only have they proven ineffective at taming inflation coming from overseas pressures, they’ve also handed windfall profits to banks, directly at the public’s expense.
“Previous governments have allowed the powerful banking lobby to persuade them against taxing these record-breaking profits in recent years, despite overwhelming public support for the policy.
“We’re calling on Andy Burnham to break with his predecessors by resisting the demands of City lobbyists and reclaiming these lost billions with a windfall tax on bank profits, the proceeds of which could be used to fund truly life-changing support for the households and businesses struggling to pay their bills right now.”
HSBC’s results showed profits jumped 23% – or £2.75billion – to £14.5billion compared to the same period last year. Its “net interest income” – or amount made from lending after paying interest on deposits – rose to £13.5billion.
HSBC boss Georges Elhedery said: “HSBC is becoming the stronger bank we set out to build. We are executing our strategic priorities with pace, precision and discipline.
“This is allowing our four businesses to focus on their core strengths, grow, work together more effectively and deepen customer relationships. The result is a bank capable of achieving more.”
