Chancellor urged to tax bank profits

CHANCELLOR Rachel Reeves should tax bank windfalls to recover taxpayer money spent on compensating losses from the Bank of England’s cash-printing drive, an influential think-tank has said.

- SION BARRY Business editor [e-mail]

Hiking a levy on the profits from major firms such as Barclays, Lloyds, HSBC and NatWest could raise up to £8bn a year for public services, according to a report by the Institute for Public Policy Research.

‘The think-tank argues the UK is an international outlier in having its Treasury pay for central Bank losses on its bond-buying quantitative easing (QE) programme.

After a period of making profits on this programme, the Bank of England is facing record losses, estimated to cost the taxpayer £22bn a year, as interest rates have risen since 2021, it warned. This money is then partly being funnelled to bank shareholders due to a “flawed” policy design, boosting profits while millions across Britain continue to face cost-of-living pressures, the report says.