Finance1 min read

Lloyds executive criticises Healey for linking bank tax rises to energy bill support

By · Via The Guardian Business · Published by Everything Blog

In short

Lloyds Banking Group chief financial officer William Chalmers challenged the Treasury's plan to raise the bank surcharge from 3% to 6% starting this January. While the government maintains the 15-month policy is strictly temporary to offset consumer energy expenses, sector leaders fear it could mimic Spain's extended banking levies. Meanwhile, Lloyds reported strong financial momentum, with pre-tax profits surging from £1.2bn to £2.3bn due to higher net interest income.

Key points

  • Industry leaders warn that using financial levies for energy relief damages economic grow…: Industry leaders warn that using financial levies for energy relief damages economic growth and predictability.
  • Banking executives express concern that the temporary 15-month surcharge could be extende…: Banking executives express concern that the temporary 15-month surcharge could be extended past March 2028.
  • Higher interest rates and the absence of prior-year motor finance provisions drove strong…: Higher interest rates and the absence of prior-year motor finance provisions drove strong bank profit gains.

Sources checked by our analysis pipeline: 1

A top Lloyds Banking Group executive has criticised the chancellor for linking bank tax increases to energy bill support for UK households, as he warned the government against extending the higher levy beyond March 2028.

Lloyds’ chief financial officer, William Chalmers, acknowledged that the economic environment was “challenging but said this should not come at the expense of the banking sector, as it provides loans that could fuel UK growth.

“Ultimately, it is important that the UK banking sector is able to deliver banking services to businesses and households and communities in a cost-effective way, in order to promote UK growth,” he said, adding that it was also important that the sector stayed internationally competitive.

“We therefore very much hope that yesterday’s tax increase is indeed a temporary measure, to help ensure the business environment remains consistent with supporting long-term investment,” Chalmers told journalists during an earnings call on Thursday morning.

The comments came less than 24 hours after the chancellor, John Healey, announced plans to double the bank surcharge, which is levied on top of corporation tax, from 3%…

Finance

More in Finance