Calls for windfill tax develop as banks ‘money in on obscene income whereas we face mortgage distress’

EXCLUSIVE: A poll by trade union body the TUC has found overwhelming public support for Chancellor John Healey to tax banks more – including among Tory and Reform voters

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The public back a windfall tax on banks’ “obscene” profits by a margin of more than three to one, exclusive polling has shown.

The survey from the Trade Union Congress (TUC) found overwhelming support from across the political spectrum, including among Tory and Reform voters.

The result was revealed on the eve of energy regular Ofgem announcing a price hike for tens of millions of households from October 1. Experts are forecasting that Ofgem will confirm on Wednesday that its price cap will rise another 4%, to £1,729 a year under its new measure of average household use, and £1,941 under its previous guide.

The TUC wants the government to use the money raised from a bank windfall tax to pay for a social tariff that could bring down energy bills by up to £559 a year for those on low and middle incomes., it claims. The trade union body has called on PM Andy Burnham and Chancellor John Healey to act after Britain’s ‘big four’ banks – HSBC, Barclays, Lloyds Banking Group, and NatWest – made more than £29billion profit in six months. 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.

TUC’s proposals

The TUC argues upping the surcharge on banks’ profits to at least 8%, on top of the 25% corporation tax they pay, could raise £9billion over four years. Raising it even higher could bring in as much as £60billion over four years, it claims.

It says the money raised could then be used to fund a permanent energy social tariff to cut energy bills for 18.7 million households. Under its proposals, the scheme would cost between £3.4billion and £5.9billion per year, depending on variations in the wholesale cost of energy and how long the current energy crisis lasts.

Setting out its idea, the TUC says there should be a standard social tariff used as a baseline for bill support which, as it stands, could slash bills by an average 25% – or £466 a year – for low income households, and up to £279 a year for those below average incomes. However, it has also suggests an “emergency ratchet” when – like now – energy bills are especially high.

Banks’ profits described as ‘obscene’

General Secretary Paul Nowak told the Mirror: “Big banks are cashing in on obscene profits while the rest of us have to put up with mortgage misery and bigger bills. It’s plain wrong – and the public knows it. It’s little wonder that voters from right across the political spectrum want banks to pay their fair share.

“Andy Burnham has been straight out of the blocks with action to ease the cost of living. But with no clear end in sight to Trump’s illegal war in Iran, energy prices are set to go up even further – and we’re going to have to see more from the government to protect living standards. That’s why the prime minister should do the common sense thing and tax bank profits to cut energy bills. This is the kind of decisive action which would show working people the prime minister is on their side.”

The TUC polling, conducted by Hold Sway, found 65% of those asked support a windfall tax on the profits of banks and other financial institutions that have made extra profits. That compared to just 18% who were opposed, with the remainder undecided.

The move is backed by 73% of Labour voters, and 71% of Lib Dems, but also 69% of Tory and 64% of Reform voters. The level of support among Green Party voters was also 64% as the party formally proposed a 38% windfall tax on the domestic profits of the big banks.

According to the TUC, the ‘big four’ have been making profits of £6.7million an hour, or £1,850 a second.

There is speculation that Mr Healey will launch a tax raid on banks to fund Mr Burnham’s public spending plans.

However, the financial sector has ramped-up warnings of the impact of any such move.

Jamie Dimon, the chief executive of Wall Street giant JP Morgan, recently warned the Chancellor against taxing banks more, claiming it could push lenders overseas.

Lobby group UK Finance said the sector paid £43billion in taxes last year and warned hikes would “reduce UK competitiveness”.

How a windfall tax could work

Banks currently pay the standard 25% corporation tax on profits. But they also have a 3% surcharge levied on top.

The TUC is calling for this 3% to be upped to at least 8%, to the level it was before being cut by the Tories in April 2023, in a move the trade union body claims would collect £9billion over four years.

However, it also suggests going further. A 16% surcharge would raise £24billion over four years, it says, while a 35% surcharge, which would be the same level as the windfall tax the Conservatives imposed on energy companies, would bring in an estimated £60billion over four years.