Sunak Mansion House speech: Positive Money response

London, 1 July 2021

In a speech delivered today at Mansion House, the Chancellor announced that companies, pension schemes, financial services firms will have to report on their impact on climate and the environment in a new set of ‘Sustainability Disclosure Requirements’. The Government said that it intends to legislate to deliver this and will set out further details of its approach to green finance regulation ahead of COP26.

The Chancellor also stated that he would not increase the 8% surcharge on bank profits, after the government raised concerns in March that the proposed higher level of corporation tax would create an excessive and ‘uncompetitive’ tax burden for UK banks. The Chancellor said today that “ongoing conversations have only reinforced my view that the combined tax rate on UK banking profits should not increase significantly from its current level”.

David Barmes, economist at Positive Money, said:

On the new Sustainability Disclosure Requirements:

“It is positive that the government will force businesses to publish their impact on the environment, but more reporting alone isn’t enough, and can’t be a substitute for real action. The Treasury and the Bank of England need to be taking concrete steps to restrict the flow of finance towards environmentally damaging activities.” 

On Sunak’s reaffirment that he will not increase the Bank Surcharge:

“At a time when so many households and small businesses have struggled, banks have continued to profit, pocketing huge amounts from the public purse through the government’s guaranteed loan schemes. There is no reason why they should be exempt from paying a fairer share of tax on these profits.”

Notes 

1. Mansion House Speech 2021 – Rishi Sunak: https://www.gov.uk/government/speeches/mansion-house-speech-2021-rishi-sunak 

2. ‘A new chapter for financial services’. Published alongside the Chancellor’s Mansion House speech, this document sets out the government’s vision for the future of the financial services sector: https://www.gov.uk/government/publications/a-new-chapter-for-financial-services 

3. Positive Money and the New Economics Foundation have published a roadmap for how the Treasury and the Bank of England can take actions to green the financial system while supporting a Build Back Better recovery: https://positivemoney.org/2021/06/encourage-green-lending-to-build-back-better-government-and-bank-of-england-told-report/

4. The 8% bank surcharge, calculated on the same basis as corporation tax, raised 1.5 billion pounds ($2.1 billion) for the government in the 2019-20 financial year. Sunak announced a review of the surcharge in his March budget statement: https://www.reuters.com/business/finance/britain-review-surcharge-bank-profits-2021-03-03/ 

5. A National Audit Office investigation in October forecast that banks would receive £1bn from the first year of interest payments from the government on 100% guaranteed Bounce Back Loans https://www.nao.org.uk/wp-content/uploads/2020/10/Investigation-into-the-Bounce-Back-Loan-Scheme.pdf

6. Positive Money is a research and campaign organisation working towards a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters. www.positivemoney.org.

7. For more information from Positive Money or to arrange a briefing/interview with a spokesperson, please contact press@positivemoney.org.uk or Anna Pick on 07948802104.

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