TUC’s Paul Nowak calls for higher bank taxes to fund cut to energy bills

TUC General Secretary Paul Nowak has urged the government to increase taxes on bank profits to fund a cut to energy bills this winter.

On the eve of the TUC Congress in Brighton, Nowak told LabourList that a “social tariff” on energy bills could ease cost-of-living pressures on households – and could be funded by reversing a tax cut for bankers implemented by the Conservatives.

He said: “The decision by the Prime Minister and the Chancellor on VAT on electricity bills was the right call, but we don’t think it goes far enough. We’re calling for this social tariff, which would support two-thirds of billpayers in the UK – so for low and middle-income households, it would take up to £560 a year off people’s bills.

“We’d fund it through the bank surcharge. The Tories cut the bank surcharge – they reduced it from eight percent down to three percent. Simply restoring the cut would generate something like £9 million over the next four years for the Treasury. Putting it up to 35 percent, which is the [same rate as] the windfall tax that the Tories put on the energy companies when we had the energy price spike, brings in £60 billion over the next four years.”

Nowak highlighted how Britain’s four largest banks have been doing “incredibly well”, with the UK’s four largest lenders generating £200 billion in pre-tax profits over the past five years.

“I want a successful, thriving financial services industry, but I think we can have a successful, thriving financial services industry at the same time as asking the banks to pay their fair share.

“I’m old enough to remember, and it wasn’t that long ago, when the British taxpayer bailed out our banks. Asking the banks to pay a little bit more in tax in order to help people with their energy bills this winter, I don’t think is unreasonable.”

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Six weeks into Andy Burnham’s time in Number 10, Nowak was optimistic and said he is willing to take the new Prime Minister at his word on delivering a “circuit breaker” in British politics.

He said: “I think he is fundamentally right that, for too many people, this economy is not working. We’ve seen wages and living standards held down, public services decimated, the loss of too many good quality jobs in the UK economy, an explosion of insecure low-paid employment.

“I want him to deliver that circuit breaker, so I want him to be bold. I want him to be ambitious, and I want him with every single decision to think about whether it benefits working people, their families and their communities.”

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Outsourcing is set to be a big topic of discussion at this year’s conference, with Nowak welcoming the commitment from Andy Burnham to bring some public utilities, including water, back into public control.

“We should have an assumption that actually there’s a value in delivering services in-house. I think that’s probably going to need more legislation to have real teeth, so that local authorities, and in education and health, can actually use that legislation to deliver in-house options – but it’s a step in the right direction.

“Our water industry is the embodiment of the failure of 40 years of neoliberalism that Andy Burnham talked about. We are the only advanced country in the world that privatised its water industry. We’ve now got a water industry that is crippled by a huge mountain of debt, that has been systematically under-invested in for decades. The likes of Thames Water should not get another pound from taxpayers or billpayers to reward their failure.

“I think there’s definitely a case for more public control and public ownership, and we want to work with the government to bring those services back.”

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After a summer of scandals over donations, Nowak was scathing in his criticism of Reform UK.

“You have to ask yourself the question – why does a crypto billionaire based offshore want to give Nigel Farage a personal gift of £5 million and donate millions of pounds to Reform?

“Is he interested in helping families with the cost of living pressures? Or is he interested in a UK government that maybe lifts some of the regulations around crypto, in which he’s got a personal interest? I’m pretty clear what the answer is. 

“Obviously, potentially our members voted for Reform in those elections in May. I think what’s happened over the last two or three months is that the more they see of Nigel Farage and Reform, the more questions they’ve got.

Nowak also criticised recent “proto-fascistic” protests in Dover and Portsmouth. He suggested a line could be drawn between Farage exploiting the death of Henry Nowak and his call for “pure cold rage” and the actions of the far-right demonstrators.

“Ultimately, I think the British public will look at that and say that is not for me.”

The TUC Congress in Brighton kicks off this afternoon, with Nowak set to address delegates tomorrow (Monday), followed by a “senior Labour speaker” on Tuesday.

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