Scottish Labour Leader Urges Chancellor to Tax Bank Profits

Scottish Labour leader Michael Marra has urged Chancellor John Healey to increase taxes on bank profits in the upcoming budget, arguing for a "progressive choice on tax." Marra, who took leadership just over a month ago, stated that large banks have made approximately £15 billion in profits in the first six months of the year and accused them of benefiting from high mortgage rates while individuals struggle with living costs.

Healey is reportedly planning to levy billions of pounds in additional taxes on major banks, citing their substantial profits as justification. This move comes as the Chancellor seeks to raise revenue for public services. Marra highlighted that Labour has already increased taxes on the wealthiest individuals and corporations, including those on private jets, private schools, and private equity, to fund services like the NHS.

However, the proposal has drawn criticism from opposition figures who warn of unintended consequences. Shadow chancellor Andrew Griffith suggested that taxing banks could lead to higher mortgage rates, as banks may seek to compensate for increased tax burdens. Richard Walker, a former Labour cost-of-living tsar, also expressed caution regarding further tax raids on businesses, including the financial sector.

Barclays recently reported a 12% increase in pre-tax profits to £2.3 billion for the same quarter last year, alongside plans to cut 5,000 jobs as part of cost-saving measures. Barclays' chief executive, CS Venkatakrishnan, indicated that tax hikes would be "bearable."

Other major banking groups, including Lloyds Banking Group, HSBC, NatWest Group, and Santander, are scheduled to release their third-quarter financial results this week.

In a separate development, reports suggest the government may shield the poorest pensioners from income tax in the upcoming budget. Healey is reportedly considering raising the income tax threshold for state pensioners to £13,036, aligning it with the full new state pension rate from April. This adjustment would prevent those solely reliant on the state pension from paying income tax on it for the first time, as the annual amount is set to exceed the current tax-free allowance of £12,570. However, individuals with any additional private pension income may not benefit from this new rate, potentially creating complex "cliff edges" and perceived unfairness among savers, according to pension industry experts. This measure is estimated to cost £200 million annually by 2030.