Advertisement
Social Justice

A windfall tax on bank profits could raise billions. Here’s how that cash could help fix Britain

If Britain were to tax bank profits at a 35% rate it could generate £14.7bn for the overstretched public purse

A windfall tax on the record profits of Britain’s biggest banks could bring in nearly £15bn for the public purse, new analysis suggests.

Britain’s ‘Big Four’ banks – Lloyds, NatWest, HSBC and Barclays – made an eye-watering £45.9bn in pre-tax profits last year.

These earnings are not normal: they far outstrip the £25.6bn those same banks made on average between 2018 and 2021, before the Bank of England started raising interest rates. High interest rates allow banks to charge more on loans.

Such bumper profits are currently taxed at a measly 3%. But it doesn’t have to be this way, campaign group Positive Money claims. Countries like Spain, the Czech Republic and Hungary have imposed windfall taxes on credit institutions. If Britain were to do the same – at a 35% rate – it could generate £14.7bn for the overstretched public purse.

Here’s what you could do with that kind of money.

Reinstate the universal winter fuel allowance – 15 times over

Last year, the government started means-testing the winter fuel payment, depriving 10 million pensioners of the annual £200-to-£300 sum. 

Advertising helps fund Big Issue’s mission to end poverty
Advertisement

The policy will save the exchequer £1.4bn – but plunge up to around 50,000 more pensioners into absolute poverty.

Help actor Michael Sheen pay off the debts of 132 million people

In an interview with the Big Issue published on Monday (10 March), actor Michael Sheen revealed he used £100,000 of his own money to pay off 900 people’s debts.

Presuming that the debt-to-person ratio stays roughly the same, £14.7bn could write off the debts of 132.3 million people.

A year of universal basic income for 765,625 people

Universal basic income means a guaranteed income for everybody in society, designed to cover people’s basic needs by providing them with a minimum income.

It has the potential to lift people out of poverty and turbocharge social mobility; according to one Finnish study, people receiving the basic income “reported better health and lower levels of depression”.

In a 2022 Welsh trial, care leavers were given £1,600 per month each for two years. £14.7bn could provide a year of UBI at this rate to 765,625 people.

Reverse the UK’s planned cuts to international aid – two and a half times over

Keir Starmer recently reduced aid spending from 0.5% of gross national income (GNI) to 0.3% in 2027. The downsizing will save around £6.1bn – but at a potentially terrible cost.

International development minister Anneliese Dodds resigned over the cuts, warning that they will “remove food and healthcare from desperate people – deeply harming the UK’s reputation”.

With £14.7bn, the government could restore the budget to pre-2021 levels of 0.7% of GNI. Labour has committed to do this when ‘fiscal circumstances allow’.

Put the entire cabinet up in London’s most expensive hotel for 67 years

All this fiscal juggling – being a politician is a stressful job. Why not use that extra fiscal windfall to reward the cabinet with a stay in one of London’s most expensive hotels?

According to Luxury London, The Royal Suite at The Lanesborough will set you back £24,000 per night. With £14.7bn, you could put all 22 members of cabinet up in style for – checks notes – 67 years. Room service not included.

Do you have a story to tell or opinions to share about this? Get in touch and tell us moreBig Issue exists to give homeless and marginalised people the opportunity to earn an income. To support our work buy a copy of the magazine or get the app from the App Store or Google Play.

Advertising helps fund Big Issue’s mission to end poverty

Never miss an issue

Take advantage of our special subscription offer. Subscribe from just £9.99 and never miss an issue.

Recommended for you

Read All
Widower of disabled woman in bitter, years-long legal battle after DWP denied him benefits
Department for Work and Pensions

Widower of disabled woman in bitter, years-long legal battle after DWP denied him benefits

Transphobia and homophobia are terrible for the economy, report finds
London Trans+ Pride
LGBTQ+ rights

Transphobia and homophobia are terrible for the economy, report finds

Migrant care worker left homeless after being 'exploited' UK employer: 'It's a national scandal'
Cardboard and a sleeping bag, on the church premises where Joseph is sleeping
Immigration

Migrant care worker left homeless after being 'exploited' UK employer: 'It's a national scandal'

Five things we learned from Pope Francis' candid and historic Big Issue interview
Pope Francis

Five things we learned from Pope Francis' candid and historic Big Issue interview

Most Popular

Read All
Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits
Renters: A mortgage lender's window advertising buy-to-let products
1.

Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal
Pound coins on a piece of paper with disability living allowancve
2.

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal

Cost of living payment 2024: Where to get help now the scheme is over
next dwp cost of living payment 2023
3.

Cost of living payment 2024: Where to get help now the scheme is over

Citroën Ami: the tiny electric vehicle driving change with The Big Issue
4.

Citroën Ami: the tiny electric vehicle driving change with The Big Issue