Barclays announced at the beginning of August that its pre-tax profits for the first half of 2024 have reached a staggering £4.2 billion. In comparison, their pre-tax H1 profits for 2018 (before the pandemic, cost of living crisis or rate rises) were £1.6 billion.
While this might seem like a cause for celebration within the bank’s boardrooms, these profits raise serious concerns about the state of our financial system and who it truly serves.
Barclays closed scores of branches and cut hundreds of jobs this year, all while maintaining its title as Europe’s biggest funder of fossil fuels. The juxtaposition of Barclays’ massive profits with its environmental and social impact is hard to swallow. It can’t be said these profits were earned from its service to the people.
And Barclays is not alone in this. Many other lenders are benefiting from the current high interest rates, which are still inflicting financial hardship on millions of families across the country. With inflation still high and the ongoing cost of living crisis, the fact that banks are raking in profits while people struggle has sparked calls for action.
One such call is for a windfall tax on these inflated profits. The idea has gained traction among some members of parliament.
The pre-election criticism Labour received for courting the City hasn’t gone away since the party took power. If our new government wants to convince people it’s not been bought by bankers, a windfall tax on these inflated profits would be a good place to start.
Recent polling commissioned by Positive Money in September 2023 found that a majority of the UK public supports the idea of a windfall tax on banks. Whether the government will heed these calls for action remains to be seen, but the public’s demand for fairness in the financial system is becoming harder to ignore.
This blog originated from Positive Money.
