Barclays announced this week that its pre-tax profits for the third quarter of 2023 were £1.9 billion. This takes its profits for 2023 so far to £6.5 billion.
These profits are the product of suffering: the high interest rates they’re derived from have flooded food banks with new users as families are forced to divert more income to high housing costs.
Barclays have cut services across the country, closing almost 200 branches this year alone, meaning that not only are these bumper profits unjust, they’re also totally undeserved.
If the government is serious about quashing inequality, it will use this year’s Autumn Statement to place a windfall tax on boosted bank profits, instead of handing them tax cuts like it did in last year’s.
Positive Money is petitioning for this windfall to be taxed.
Higher interest rates mean that the Bank of England is expected to pay an estimated £75bn of interest on banks’ risk free reserves over 2023 and 2024, with a total of around £150bn due to be paid out between 2022 and 2028.
Calls for a windfall tax on banks have been echoed by MPs, including Angela Eagle, John McDonnell, Clive Lewis, Diane Abbott and Richard Burgon
Polling commissioned by Positive Money found the majority of the public supports a windfall tax on banks.
On Wednesday, Lloyds Banking Group also made an announcement that its pre-tax profits for the third quarter of 2023 were £1.9 billion.
Whilst ordinary people are pushed into poverty by soaring interest rates, banks are filling their coffers amidst the misery.
To raid household incomes whilst paying tens of billions of public money to banks during a cost of living crisis was a massive misstep by the Bank of England, but banks haven’t helped the situation by dragging their feet passing rates on to savers and cutting branches countrywide.
With the Autumn Statement on the horizon, the government can redress the unequal impacts of unfair interest rate rises by reversing the tax cut they handed to banks in April, and introducing a windfall tax on bank profits that would generate billions to support those hardest hit.
Then, NatWest announced this morning that its pre-tax profits for the third quarter of 2023 were £1.3 billion, taking its profits for 2023 so far to £4.9 billion. They also cut 123 branches this year alone.
There is no justice in allowing millions to go hungry and homeless whilst financial firms flourish, especially when interest rates can’t actually address the supply-side shocks driving most of the inflation we’re experiencing. If he’s serious about shielding those on the lowest incomes from destitution, the Chancellor must use the Autumn Statement to place a windfall tax on bank profits, and use the billions generated to protect the poorest among us from poverty.
