Bankers’ windfall tax urged to fund UK cost-of-living measures after HSBC profit surge

Campaign groups are pressing for a windfall levy on UK banks that could raise about £19 billion for Andy Burnham’s cost-of-living programme, following HSBC’s 60% profit jump to £7.5 billion in Q2.

HSBC announced a 60% increase in quarterly profit, reaching $10.1 billion (£7.5 billion) for the period ending June, thanks to wealth-management fees, insurance income and higher loan rates. Chief executive Georges Elhedery hinted at larger bonuses and the revival of a share-buy-back programme that had been paused. The combined earnings of the four biggest UK banks now total £29.2 billion for the first half of the year, prompting campaigners like Positive Money and the Trades Union Congress to demand a fresh windfall tax that could raise roughly £19 billion.

They propose mirroring Spain’s 38% levy on bank profits exceeding £800 million, arguing the revenue would cover multiple cost-of-living initiatives, including an £850 million VAT cut on electricity, a £500 million bus-fare cap and a £100 million reduction in business rates for hospitality venues. While banking executives stress the importance of robust banks for the new prime minister’s growth agenda, union leader Paul Nowak and ActionAid UK’s Joanne O’Neill warned that banks can afford higher taxes and should also be held accountable for climate-related financing.