Banks braced for Budget battering – as unions claim whopping 35% windfall tax would raise £60bn

The Chancellor is expected to raise the bank surcharge in the Budget, prompting a dispute over whether lenders should pay more to help fund lower household energy bills. Unions argue that banks’ profits justify a larger contribution, while critics warn higher taxes could raise borrowing costs and weaken the UK’s competitiveness.

The Trades Union Congress says an increase in the surcharge from 3 per cent to 8 per cent could raise more than £2 billion a year; a 35 per cent rate, it argues, could bring in £15 billion annually, or £60 billion over four years. HSBC reported a 32 per cent rise in third-quarter profits to £7.2 billion, including £1.4 billion from UK operations, but lowered its UK growth forecast for 2027 from 1.4 per cent to 1.1 per cent. The article also notes that the existing surcharge is added to corporation tax and that HSBC says moving its headquarters from London is not under consideration.