\nWhat is the Budget and what could be in it?<\/p>\n<\/li>\n<\/ul>\n<\/div>\n
There are a number of ways the chancellor could extract more money from the sector.<\/p>\n
One option is for Healey is to reverse a reduction in the surcharge that banks pay on corporation tax, from 8% to 3%, introduced in 2023, by Conservative chancellor Jeremy Hunt. <\/p>\n
Critics argue this would be unfair noting the cut coincided with a rise in corporation tax from 19% to 25%.<\/p>\n
Healey could also raise the bank levy – a small percentage charged on loans.<\/p>\n
Speaking to the press in Bangkok, Healey praised the role banks play in the British economy. <\/p>\n
Adding that he has “decisions to take in the Budget”, he said: “My observation on the banks is that people too often see \u200bthem as big, distant financial institutions, when they are hardwired into the economic fabric of this country and our future \u2060prospects.”<\/p>\n
Shares in Lloyds and NatWest fell on Friday on expectations that the sector would be hit by tax hikes. <\/p>\n
In the past banks have successfully argued that higher taxes would risk making the UK uncompetitive with other jurisdictions and would reduce their ability to lend, and therefore be anti-growth.<\/p>\n
Sir Philip Augar, an author and former banker in the City of London, told the BBC’s Today programme there was “room for a moderate increase” in taxes on the sector that could raise up to \u00a33bn a year.<\/p>\n
He said lenders were enjoying “booming conditions”, benefiting from higher interest rates which boost their profits.<\/p>\n
Rising interest rates have expanded the margin between the rate at which banks lend to customers and the rate they pay savers.<\/p>\n
Sir Philip added that when the banking sector “hits really rocky times it expects the taxpayer to bail them out – when it hits boom times, it expects some kind of special treatment”.<\/p>\n
He said banks cannot simultaneously be “too big to fail and too big to tax”.<\/p>\n
Paul Nowak, general secretary of the Trades Union Congress, which represents trade unions, said Britain’s four biggest banks are making a billion pounds a week, with bonuses at post-financial crash records. “These are bumper profits – driven by high interest rates and households’ mortgage misery,” he said.<\/p>\n
“Now it’s time to make sure banks pay their fair share,” he added. <\/p>\n
“But if the chancellor does ask the Banks to pay a fairer share of tax in the Budget, that’s 100% the right call,” he added.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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<\/p>\nBurnham announces scheme to help first-time buyers onto housing ladder<\/span><\/p>\n<\/span><\/p>\n
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