Healey mulls restoring bank surcharge as UK budget faces rising debt costs

Ahead of the October 28 budget, Chancellor John Healey indicated he may undo Jeremy Hunt’s reduction of the bank profit surcharge from 8% to 3%, pointing to weekly earnings of a billion pounds by the big four banks and record bonuses. The Treasury has already forfeited £6 billion from that cut, and the TUC suggests a 16% surcharge could bring in £24 billion over four years. The Institute for Public Policy Research recommends a temporary windfall levy to raise £1 billion as part of a £16 billion package for struggling households.

Business voices, including the Confederation of British Industry, argue higher taxes would undermine the UK’s financial-services competitiveness. Labour’s shadow chancellor Andrew Griffith warned that a “raid” on banks would stifle growth, while Healey signaled limited extra funding for public-sector pay rises and faced criticism for a light-hearted video in Bangkok shortly before the fiscal showdown.