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A key priority for this government should be driving growth: from planning reform to a greater industrial strategy, and a thriving financial sector is an important part of that mission. But bank profits have been exceptionally high in recent years.

Institute for Public Policy Research

@ippr.org

Interest rates have risen, yet the CMA has found that higher rates have not always been fully passed on to consumers. At the same time, taxpayers will cover around £18bn a year in Bank of England losses for the rest of this parliament, largely because of the way quantitative easing was implemented.

6/10/26, 4:17 pm0 reposts0 likes

Institute for Public Policy Research

@ippr.org

That’s why we’ve argued for a temporary, targeted levy on banks to help claw back some of those taxpayer losses. Crucially, there is precedent for this approach: Margaret Thatcher’s government introduced a 2.5% tax on bank deposits in 1981 after profits surged following higher interest rates.

Institute for Public Policy Research

@ippr.org

Done carefully and temporarily, this could raise revenue without undermining our financial sector’s international competitiveness.