‘Burnham – and Britain – can’t afford to be held hostage by bankers’

Listening to the TUC’s Paul Nowak on Monday as he refused to get out “the world’s smallest violin” for bank CEOs worried about facing higher taxes in the Budget, it was hard to disagree with the case he made.

Britain’s four biggest banks reported profits of almost £30 billion for the first six months of 2026, putting them on track for a record-breaking year. The government is a key source of these profits, as it foots the bill for the billions of pounds the Bank of England pays banks in interest on their reserves each year. And although banks do pay slightly more tax than other corporations – in recognition of the oversized risks their activities pose to the wider economy – it’s worth remembering that those taxes were slashed by the Conservative government in 2023, precisely when banks were starting to feel the gains from higher interest rates.

Yet bank bosses, especially JPMorgan’s Jamie Dimon, continue to take to the airwaves and insist that higher taxes would break Britain’s banking sector. Just last week, Dimon met with Burnham and Healey, and claimed that a windfall tax would harm investment and employment in Britain. But do these warnings hold water?

The truth is, banks are already failing to invest in this country. Earlier this year, the Boston Consulting Group found that bank lending to UK businesses has fallen to its lowest level since 1998. Analysis of bank lending data also shows that the lion’s share of loans go towards safe assets (predominantly existing property) rather than productive, job-creating industries (such as construction or manufacturing).

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If banks were truly worried about their capacity to invest, it’s unlikely we’d see them diverting almost half of their profits (£13.7 billion) to shareholders, or paying out the kinds of bonus packages unseen since the 2008 crash. These are not the actions of a sector struggling under the weight of its “tax burden”.

It’s also hard to take threats of job cuts seriously, given the speed with which the banking sector is already handing out redundancies. This year alone, the boss of Metro Bank received a record-breaking pay packet after slashing 1,000 jobs, and Standard Chartered’s CEO was forced to apologise for referring to the 7,000+ staff losing their jobs to AI as “lower value human capital”. HSBC is also reportedly considering up to 20,000 job cuts worldwide because of AI, and the branch closures we’ve seen from all banks across the country are putting hundreds more people out of work.

Fundamentally, the threats being made by bank bosses ring hollow. Even Dimon’s ploy to pull plans for new UK offices if banks are taxed more in the Budget is difficult to believe – given it’s exactly the same threat he made to Alistair Darling when he proposed taxing bankers bonuses back in 2009 – and the planned offices went ahead anyway, despite the bonus tax being introduced.

The real issue here is not bank CEOs themselves. What industry wouldn’t push back against higher taxation? The real issue is the level of access City lobbyists have to senior government figures. Facetime for the finance sector has historically far outstripped that given to other sectors, and dwarfs the access unions and civil society organisations receive. But as Nowak said in his speech, Burnham must be prepared to “face down vested interests” to deliver truly transformative support for struggling families and businesses.

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At Positive Money, we have proposed a windfall tax only targeting the UK profits of Britain’s biggest banks, so as not to harm the competitiveness of their international investment arms. The fact that we still predict the Treasury could bring in £19 billion from the four biggest banks this year speaks to how heavily bank profits are being drawn from the UK public and government. The TUC predicts that even just reversing the tax cuts banks received under the Conservatives would raise £9 billion over four years.

Public frustration is mounting at the influence big business and billionaires are exerting over our democracy, and there’s a growing sentiment that in UK politics you have to pay to play. The decision before Burnham and Healey is a clear one: allow a sector that neglects the UK, showers shareholders in cash, and profits from the public to continue doing all of the above, or tax banks’ windfall profits, and use that money to fund a support package that people can actually feel the impacts of. Whichever they choose will be decisive in showing the public whose side this government is on.

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