On Westminster Bridge, demonstrators wearing masks of major bank CEOs recently called for a windfall tax on banks to address their rising domestic profits amid ongoing inflation. Various organizations, including Positive Money and Tax Justice UK, argue that banks, similar to the oil and gas sector, should be taxed on their profitability. They question why the government has implemented a 35% energy profits levy but not a comparable measure for banks, which they consider essential services.
Opponents, represented by lobby group UK Finance, contend that such a tax could harm the competitiveness of British banks compared to their foreign counterparts. Campaigners counter that the proposed tax would only target UK retail profits and not affect broader investment contributions. Meanwhile, banks have reportedly reduced investments in the economy while increasing shareholder payouts.
As the government approaches its budget discussions, lobbying efforts are intensifying. Some media outlets provide significant coverage of warnings against potential tax increases, while pro-tax demonstrations receive less attention. Among the various tax proposals being discussed are a 50% tax on gambling profits and a mansion tax on properties exceeding £2 million, with both facing strong pushback from affected industries.
Proposals to equalize national insurance contributions and reform business rates also provoke responses from various stakeholders, including landlords and supermarkets. Concerns about the impact of these changes on the economy and job market are prevalent in discussions.
The chancellor faces a challenging task of balancing the need for revenue generation with maintaining public and business confidence. While certain taxes targeting high earners and specific sectors have public support, suggestions for raising universal taxes face widespread opposition. The government’s messaging around taxation remains complex, necessitating careful consideration to ensure long-term economic stability while addressing public demands for fairness.
Source: https://www.theguardian.com/commentisfree/2025/oct/31/budget-lobbying-rachel-reeves-taxes-labour