UK public support windfall tax on banks, polling shows

Momentum for windfall tax grows as Bank of England rate hikes boost bank profits

London, 21 September 2023 – Only 12% of UK adults oppose a windfall tax on banks, whereas 58% are in support, YouGov polling commissioned by research and campaign group Positive Money has today revealed.

The results come as UK banks have been reaping record profits from higher interest rates, with the Bank of England expected to hike rates for the 15th consecutive time to 5.5% today. In July the UK’s four biggest banks (HSBC, Barclays, Lloyds and NatWest) reported profits of £28.93bn for the first six months of this year. 

Soaring bank profits are being squeezed from the UK public, who are footing the bill for rising debt costs without seeing higher rates passed onto their savings. The Bank of England is also expected to pay £42bn of interest on banks’ risk-free reserves in 2023, the cost of which is ultimately borne by the public purse.

The YouGov polling found that 30% strongly support a windfall tax on banks, 28% tend to support, while only 3% strongly oppose, 9%  tend to oppose, and 30% answered “Don’t know”. There is majority support among those who voted for each of the three main UK parties (Conservative, Labour and Liberal Democrats) in 2019. 

Analysis by Positive Money suggests that a levy replicating the windfall tax on energy companies could be expected to raise £20bn in 2023 from the big four banks alone – equivalent to more than £700 per UK household.

Protestors will be demonstrating outside the Bank of England today against the unfair impacts of interest rate rises, calling on the government to introduce a windfall tax on banks.

Caroline Lucas, Green Party MP for Brighton Pavilion, said:

“The profits of the big four banks for the first half of this year were up 700% compared to 2020 – yet rather than tax those obscene profits fairly, the Treasury has cut the surcharge they pay by 60%. 

“With inequality rising and millions struggling with huge energy bills and housing costs, a windfall tax on banks’ excess profits could raise as much as £20 billion to help those most in need. 

“I’d urge the Chancellor to stop putting profits before people and adopt this windfall tax now.”

Clive Lewis, Labour Party MP for Norwich South, said: 

“I welcome a windfall tax on banks’ excessive profits as a first step towards a fairer economy. Ultimately, we need to deal with the causes: outsourcing decisions of critical national importance to institutions outside of democratic control, which are representing the interests of the 1%.”

Fran Boait, co-executive director, at Positive Money, said:

“Banks’ record profits are coming at the direct expense of the public, who are footing the bill for higher interest rates. These profits aren’t being reinvested back into the economy or creating new jobs, with banks shutting down branches across the country.

“After the crash an extra tax on banks’ profits was introduced to help ensure the sector makes a fair contribution, but the government has actually recently cut this surcharge, just when it is needed more than ever.

“Jeremy Hunt should take a leaf from the Thatcher government’s book and introduce a windfall tax on banks’ unearned profits in the upcoming Autumn Statement, which could help fund support for households during the cost of living crisis.”

Notes

1. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,097 adults. Fieldwork was undertaken between 14th – 15th September 2023. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).

2. Full polling results can be downloaded here: http://positivemoney.org/wp-content/uploads/PositiveMoney_WindfallTax_230915.xls 

3. For more information on how banks are profiting from higher interest rates and how much a windfall tax could raise see: http://positivemoney.org/wp-content/uploads/Options-for-a-windfall-tax-on-banks-1.pdf 

4. More details on the protest outside the Bank of England can be found here: https://actionnetwork.org/forms/join-our-action-outside-the-bank-of-england-2 

5. For additional comment or to arrange an interview with a spokesperson, please email press@positivemoney.org.uk or call Chloe Musto on 07724980666

About Positive Money

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.uk