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Bank bosses brace for Downing Street meeting on tax Exact details of the meeting and the names of those attending were still unclear By John Paul-ford Rojas Updated: 17:01 EDT, 7 September 2024 e-mail View comments Bank bosses will be summoned to a meeting with the Chancellor this week amid speculation that Labour could be mulling a windfall tax on the sector. Chief executives of some of Britain’s biggest lenders are expected to attend the summit with Rachel Reeves in Downing Street on Thursday, The Mail on Sunday has been told. Exact details of the meeting and the names of those attending were still unclear last night, but one source said Bank of England Governor Andrew Bailey will also be there.
Time to meet: Bank of England Governor Andrew Bailey is expected to be present at the meeting Bosses of Britain’s lenders include Lloyds boss Charlie Nunn, Barclays chief CS Venkatakrishnan, HSBC’s chief executive Georges Elhedery – who took over last week – Paul Thwaite of NatWest, Santander’s Mike Regnier and Nationwide’s Debbie Crosbie. The source said the meeting was likely to cover so-called Basel reforms – rules designed to shock proof global lenders from collapsing that were developed after the financial crisis. RELATED ARTICLES Previous 1 Next MARKET REPORT: Burberry hits 14-year low after Footsie exit Industry woe for 'the sick man of Europe' Germany ALEX BRUMMER: Wall Street storm warning as US economy heads.
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.. Share this article Share HOW THIS IS MONEY CAN HELP How to choose the best (and cheapest) stocks and shares Isa The Bank of England will announce its ‘final’ interpretation of those rules on the same day as the meeting.
But bosses are also bound to be anxious about any new tax raid on the sector. One industry source said lenders were ‘getting very jittery and assuming it is about the Budget or a windfall tax’. Banks have seen their profits boosted by higher interest rates, and a former senior Whitehall official was recently quoted as saying they would be a possible target, telling the Financial Times: ‘They’ve got broad shoulders and no one likes banks.
’ The Treasury would not comment on this week’s meeting or answer questions about tax plans ahead of the Budget. Summons: Barclays chief executive CS Venkatakrishnan is expected to attend the meeting But a spokesman said ‘difficult decisions lie ahead to fix the foundations of our economy and address the £22billion hole in the public finances left by the last government’. Recent research by campaign group Positive Money found that a 35 per cent tax on the £44.
3billion pre-tax profits reported by HSBC, Barclays, Lloyds and NatWest in 2023 would raise £14billion. Another option could be to increase the 3 per cent surcharge on profits that lenders already pay. During the Election campaign there was talk of reducing the amount of interest paid to lenders on the money they have deposited at the Bank of England.
Figures from the House of Commons’ Treasury select committee, published earlier this year, showed NatWest, Barclays, Lloyds and Santander together received more than £9billion interest on the reserves, a 135 per cent increase on the previous year. That creates a potentially lucrative target for the Chancellor though she has previously poured cold water on the idea of targeting the arrangement, saying before the Election that there were ‘no plans’ to do so and that changing the system may pose ‘dangers’. And bank insiders say any such move would simply result in a worse deal for customers.
However, since the election Reeves has published a spending audit suggesting that the public finances were in a much worse shape than she expected – with a £22billion-a-year black hole. And her boss, Keir Starmer, has said that next month’s Budget will see ‘painful’ choices – with the heaviest burden inflicted on those with the ‘broadest shoulders’. DIY INVESTING PLATFORMS AJ Bell AJ Bell Easy investing and ready-made portfolios Learn More Learn More Hargreaves Lansdown Hargreaves Lansdown Free fund dealing and investment ideas Learn More Learn More interactive investor interactive investor Flat-fee investing from £4.
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