'Banks continue to prosper from the same higher interest rates which have forced thousands into mortgage arrears'
Calls to introduce a windfall tax on banks have grown amid the latest profit reports by the UK’s big banks, which have increased since the pandemic and cost of living crisis.
The not-for-profit organisation, Positive Money, that advocated for banking reforms, has called once again for the government to place a windfall tax on bank profits, with banks recording profits that far exceed the pre-pandemic period.
HSBC reported pre-tax profits of £16.85bn for the first half of 2024 and has given a further $4.8bn to shareholders.
“HSBC’s latest profits are proof that not everyone is worse off from the cost of living crisis, with the bank having made far more than they did in the low interest rate period before the pandemic,” said Ellie McLaughlin, senior policy and advocacy officer at Positive Money.
McLaughlin said: “If the new government wishes to dispel swelling rumours that it’s allowing City lobbyists to trade cash for access to policymakers, it should place a windfall tax on these unmerited bank profits, showing that it intends to work in the public’s best interests, not bankers’.”
Contributing LFF editor Prem Sikka said: “HSBC hands another $4.8bn to shareholders in dividends and share buybacks. $34.4bn in the last 18 months.
“Profits rise without extra effort. To manage inflation govts force people to hand wealth to banks and their shareholders. Why no windfall tax?”
MPs including Richard Burgon, Diane Abbott, John McDonnell, Clive Lewis and Angela Eagle have previously called for a windfall tax on banks, with pressure ramping up last year when the UK’s Big Four banks, Lloyds, HSBC, Barclays and Natwest, together recorded pretax profits of £44.2bn for 2023, up 41% from 2022 as they benefited from global interest rate hikes.
HSBC reported a 80% jump in its pre-tax profit at the start of this year, which rose to $30.3bn (£24bn) in 2023.
Hannah Davenport is news reporter at Left Foot Forward
To reach hundreds of thousands of new readers we need to grow our donor base substantially.
That's why in 2024, we are seeking to generate 150 additional regular donors to support Left Foot Forward's work.
We still need another 117 people to donate to hit the target. You can help. Donate today.