Windfall tax on banks could raise 8bn a year, Rachel Reeves told

"Rachel Reeves should tax bank profits to recover taxpayer money spent on compensating losses from the Bank of England's cash-printing drive, a think tank has said. Hiking a levy on the windfalls from major firms such as Barclays, Lloyds, HSBC and NatWest could raise up to 8 billion a year for public services, according to a report by the Institute for Public Policy Research."

"After a period of making profits on this programme, the Bank of England is facing record losses, estimated to cost the taxpayer 22 billion 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."

Rachel Reeves should tax bank profits to recover taxpayer money spent compensating losses from the Bank of England's quantitative easing programme, a think tank recommends. A levy on windfalls at major firms such as Barclays, Lloyds, HSBC and NatWest could raise up to 8 billion a year for public services. The UK stands out for having its Treasury cover central bank QE losses. Rising interest rates have turned prior QE profits into record losses estimated at 22 billion a year, with some of that money flowing to bank shareholders and worsening cost-of-living pressures. A QE reserves income levy, modelled on the 2.5 per cent 1981 deposit tax, is proposed to rebalance outcomes.

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