The City has spent the better part of two decades fighting the levies they were forced to shoulder as recompense for the 2008 banking meltdown. Photograph: Ian Pilbeam/Alamy View image in fullscreen The City has spent the better part of two decades fighting the levies they were forced to shoulder as recompense for the 2008 banking meltdown. Photograph: Ian Pilbeam/Alamy Banking Bank battle: history suggests Burnham faces fight if he opts for windfall tax As lenders’ profits soar, calls grow for a levy to help new PM ease cost of living pressures on households
Kalyeena Makortoff Banking correspondent Wed 5 Aug 2026 07.00 CEST Share Prefer the Guardian on Google I t has been a stellar week for UK banks. Fuelled by high interest rates and market turbulence rippling out from the US war on Iran, major lenders have revealed soaring half-year profits that allowed bosses to boost bonus pots and give billions of pounds to shareholders.
Collectively, the UK’s four largest lenders – HSBC, NatWest, Barclays and Lloyds – reported £29.2bn in profits over the first six months of the year, with almost half, £13.7bn, pledged to investors through dividends and share buybacks.
Those bumper figures have turbocharged calls for a tax increase on banks. Campaigners say raising taxes on their earnings could yield £19bn from the big four banks alone , helping to offset the price of the prime minister Andy Burnham’s ambitious plans to slash living costs and overhaul the UK’s social care system.
“This is not a ‘hard choice’,” the TUC’s general secretary, Paul Nowak, said last week. “Banks can easily afford to pay more tax. This is a chance for the new prime minister and chancellor to show whose side they’re on.”
The campaign group Positive Money echoed those sentiments, saying: “We’re calling on Andy Burnham to break with his predecessors by resisting the demands of City lobbyists and reclaiming these lost billions with a windfall tax on bank profits, the proceeds of which could be used to fund truly life-changing support for the households and businesses struggling to pay their bills right now.”
View image in fullscreen Campaigners have urged Andy Burnham to ‘break with his predecessors by resisting the demands of City lobbyists and reclaiming these lost billions with a windfall tax on bank profits’. Photograph: Jack Taylor/Reuters Burnham has not made any specific comments about a bank tax so far. However, in June he said people needed help now with rising costs. “While not taking risks with the public finances, [I] will seek to give Britain some breathing space as soon as I can,” he said.
The TUC’s Nowak said: “Andy Burnham has rightly prioritised cost of living measures in his first days as prime minister, but as the war in Iran rumbles on, energy prices will rise further – and the government will need to do more to protect households. That’s why it’s time to increase the tax on bank profits to cut bills.”
So the City is steeled for battle, having spent the better part of two decades fighting the levies it was forced to shoulder as recompense for the disastrous 2008 banking meltdown.
Some influential executives have already fired warning shots, saying crucial lending could be throttled and that lucrative investments – such as JP Morgan’s £3bn Canary Wharf HQ – could be on the line. “We paid probably $10bn (£7.4bn) in extra taxes by now, I don’t think that’s right or fair. If that happens too much, we will reconsider,” the Wall Street bank’s chief exe…