Lloyds finance boss requires ‘steady tax regime’

Lloyds yesterday urged Labour to stick by its pro-growth promises in next week’s Budget as it sounded a warning over any potential tax rises for the banking sector.

The lender’s chief financial officer William Chalmers (pictured) said it was already one of the UK’s biggest taxpayers and that the country must have a ‘competitive, stable tax regime’ to promote the investment the country needs.

It came as Lloyds Banking Group – which also owns Halifax and Bank of Scotland – reported better than expected third quarter profits of £1.8billion. 

But at the same time the bank – which is Britain’s biggest mortgage lender – and its customers are facing uncertainty ahead of Rachel Reeves’s first Budget next Wednesday.

Asked about the possibility of bank tax hikes, Chalmers said: ‘The bank sector – and certainly we at Lloyds – are one of the UK’s largest taxpayers already, and actually we take some pride in making our contribution to the society of which we are a part. 

Warning: Lloyds’ chief financial officer, William Chalmers (pictured), said it was already one of the UK’s biggest taxpayers and that the country must have a ‘competitive, stable tax regime’

‘It is also the case that it is important to have a competitive, stable tax regime to encourage the type of investment and the type of lending that we would seek to do to promote the growth agenda.

‘We note the Government’s commitment to growth and very much hope the Budget is going to be consistent with that agenda.’

Speculation has swirled since the election that the Government could target banks with a windfall tax or an increase in the current 3 per cent surcharge on profits that lenders already pay.

Reeves is seeking to target those with ‘broader shoulders’ as she looks to close a £40billion gap in the public finances – and the banks have enjoyed handsome profits thanks to higher interest rates in recent years. 

Figures earlier this week from trade body UK Finance showed banks and their employees contributed a record £44.8billion in taxes in the year to March.

Chalmers said the bank hoped the Budget would be a ‘pro-growth’ event and ‘if that is the case, it should help the mortgage market’.

He said he hoped Reeves would be able to deliver ‘clarity’ about her plans.

Profits at Lloyds were 2 per cent lower than the same time last year but better than the £1.6billion forecast by analysts. Shares fell 0.6 per cent, or 0.38p, to 61.62p.

The bank said its customers were showing increasing financial confidence as cost-of-living pressures ease.